Australian Stock Market Report – Morning January 12, 2015

A man walks into a Centrelink, part of the Australian government's department of human services where job seekers search for employment, in a Sydney suburb, August 7, 2014. Australia's jobless rate jumped to a 12-year high of 6.4 percent in July in what could be a major blow to consumer confidence, knocking the local dollar lower as markets priced in a greater chance that interest rates could be cut again. Reuters/Jason Reed

* In US economic data, non-farm payrolls (employment) rose by 252,000 in December, ahead of forecasts for a gain of 240,000. The unemployment rate fell from 5.8% to 5.6%. And average earnings fell by 0.2%, short of forecasts for a 0.2% gain. And wholesale sales fell 0.3% in November with inventories up 0.8%.

* European shares fell on Friday. Shares in energy stocks fell as oil prices fell again. And shares in Spain's Santander bank fell by 13% after announcing a discounted capital increase, weighing on banking shares more broadly. The FTSEurofirst 300 index fell by 1.7% to end the week down 1.1%. The German Dax fell by 1.9% and the UK FTSE fell by 1.1%. In London trade shares in BHP Billiton lost 0.8% while Rio Tinto fell by 1.4%.

* US sharemarkets gave back just over half of Thursday's gain on Friday. Economic data was mixed and some traders took profits ahead the start of earnings season. The S&P retail index fell 1.7% on soft reports by retailers. The Dow Jones fell by 170 points or 1.0% with the S&P 500 index down by 0.8% and the Nasdaq fell by 32 points or 0.7%. Over the week the Dow and Nasdaq lost 0.5%and the S&P 500 lost 0.6%.

* US treasuries rose on Friday (yields lower) as jobs data confirmedthat the Federal Reserve doesn't need to rush with rate hikes. US 2 year yields fell by 5pts to 0.57% while US 10 year yields fell by 7pts to 1.95%. Over the week US 2 year yields fell by 10 points and US 10 year yields fell by 9 points.

* Major currencies rose against the greenback in European and US trade on Friday. The Euro rose from lows near US$1.1760 to highs near US$1.1845 and ended US trade near the highs. The Aussie dollar rose from lows near US81.10c to highs around US82.05c and ended US trade near the highs. And the Japanese yen lifted from 119.73 yen per US dollar to JPY118.42 and was near JPY118.50 in late US trade.

* World oil prices fell on Friday but recovered from lows late in the session after data showed a sharp drop in the oil rig count. Baker Hughes reported that the number of rigs drilling for oil in the US fell by 61 this week, the biggest weekly fall in 24 years. Brent crude fell by US85c or 1.7% to US$50.11 a barrel while the US Nymex crude price fell by US43c or 0.9% to US$48.36 a barrel. Over the week Brent fell by US$6.31 or 11.2% and Nymex fell by US$4.33 or 8.2%.

* Base metal prices were lower by up to 1.6% on the London Metal Exchange on Friday. Nickel led the declines but lead bucked the trend, up 1.0%. Over the week metal prices fell up to 2.4% but nickel gained 3.2%. Gold rose on Friday in response to weaker equities and a softer greenback. The Comex gold futures price was up by

US$7.60 an ounce or 0.6% to US$1,216.10 per ounce. Over the week gold rose by US$29.90 or 2.5%. Iron ore fell by US80c to US$69.80 a tonne on Friday and fell by US$1.40 over the week.

Ahead: In Australia, housing finance and job advertisements data are released. In the US, no major economic data is released. Alcoa releases its earnings results to kick off earnings season.

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