Australian Stock Market Report – Morning August 4, 2014

* In US economic data, non-farm payrolls (employment) rose by 209,000 in July, just short of forecasts tipping a 233,000 lift in jobs. The unemployment rate rose from 6.1% to 6.2%. Personal income rose 0.4% as expected in June. The ISM purchasing managers index rose from 55.3 to a 3-year high of 57.1 in July, above the forecast of 56.0.

* The Chinese non-manufacturing (services) purchasing managers index eased from 55.0 to 54.2 in July.

* European shares fell to 1½ month lows on Friday with investors focussed on Russian sanctions, the Argentina debt default and assistance by the Portuguese Government to Espirito Santo. The FTSEurofirst 300 index fell by 1.2% with the German Dax down by 2.1% while the UK FTSE lost 0.8%. Australia's major miners were also lower in London trade with shares in BHP Billiton down by 0.9% while Rio Tinto lost 1.1%.

* US sharemarkets fell on Friday as investors digested a raft of economic indicators and geopolitical events. The Dow Jones index lost 70 points or 0.4% with the S&P 500 index down by 0.3% while the Nasdaq lost 17 points or 0.4%. Over the week the Dow lost 2.8% while the S&P 500 fell by 2.7% while the Nasdaq lost 2.2%.

* US treasury prices rose on Friday (yields lower) as data showed job creation fell short of forecasts in July. US 2 year yields fell by 7 points to 0.476% while US 10 year yields were down by 7 points to 2.494%. Over the week US 2 year yields fell by 3 points while US 10 year yields rose by less than 1 point.

* Major currencies were firmer against the US dollar following weaker-than-expected US jobs data. The Euro rose from lows near US$1.3380 to around US$1.3440, before ending US trade near US$1.3430. The Aussie dollar lifted from lows near US92.70c to highs near US93.30c before ending the US session close to US93.10c. And the Japanese yen rose from 103.02 yen per US dollar to JPY102.34, ending US trade near JPY102.61.

* World oil prices fell on Friday on fears that a raft of geopolitical issues could serve to crimp energy demand. Brent crude fell by US$1.18 or 1.1% to US$104.84 a barrel and the US Nymex price fell by US29 cents a barrel to US$97.88 a barrel. Over the week Brent fell by US$3.55 a barrel or 3.3% while US Nymex lost US$4.21 a barrel or 4.1%.

* Base metal prices fell by between 0.3-1.7% on Friday with tin down the most and lead down the least. Over the week, base metal prices fell up to 4.2% after rising up to 4.5% the previous week. Gold prices rose on Friday in response to geopolitical jitters. The Comex gold futures quote rose by US$12.00 or 0.9% ti US$1,294.80 per ounce. Over the week gold fell by US$8.50 an ounce. Iron ore fell by US40c on Friday or 0.4% to US$95.20 a tonne. But over the week iron ore rose by US90c.

Ahead: In Australia, the ANZ job advertisement series is released with retail trade figures. In the US, the USM New York index is released.

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