In US economic data, import prices fell by 1.4% in July (survey – 1.0%) but were up 8.8% on the year. Export prices fell by 3.3% in July (survey: -1.1%) but were 13.1% higher on a year ago. The preliminary University of Michigan consumer sentiment index lifted from 51.5 to 55.1 in August (survey: 52.5).
European sharemarkets closed higher on Friday. The travel & leisure sector rose 3.9% to 2-month highs in response to a positive earnings update from betting firm, Flutter. The pan-European STOXX 600 index rose by 0.2% to be up 1.4% for the week. The German Dax index rose by 0.7% and the UK FTSE index rose by 0.5%. In London trade, shares of Rio Tinto rose by 0.6% while BHP shares fell by 0.5%.
US sharemarkets were firmer on Friday on hopes that inflation has peaked. All of the 11 S&P 500 sectors posted gains with banks up 1.4%. Semiconductors gained 3%. According to Refinitiv estimates, S&P 500 companies posted 9.7% earnings growth in the June quarter, above earlier forecasts of 5.6%. The Dow Jones index closed up by 424 points or 1.3%. The S&P 500 index rose by 0.7% and the Nasdaq index lifted by 268 points or 2.1%. Over the week the Dow rose by 2.9%; the S&P 500 rose by 3.2%; and the Nasdaq rose by 3.1%.
US treasuries were mixed on Friday. According to Reuters, federal fund futures are pricing in a 55.5% chance of the Federal Reserve raising rates by 50 basis points when it meets in September, instead of 75 basis points. US 10-year yields fell by 5 points to near 2.84%. But US 2-year yields lifted by around 2 points to near 3.25%. Over the week both US 10-year and 2-year bond yields rose by 2 points.
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Major currencies were mixed against the US dollar in European and US trade. The Euro fell from highs near US$1.0320 to lows near US$1.0240 and was near US$1.0260 at the US close. The Aussie dollar held between US70.85 cents and US71.28 cents and was near US71.20 cents at the US close. But the Japanese yen eased from near 133.17 yen per US dollar to JPY133.86 and was near JPY133.48 at the US close.
Global oil prices fell by near 2% on Friday on expectations that supply disruptions in the US Gulf of Mexico would only be temporary. Profit-taking was also in evidence as investors weighed differing views on the oil market outlook. The Brent crude price fell by US$1.45 or 1.5% to US$98.15 a barrel. And the US Nymex crude price lost US$2.25 or 2.4% to US$92.09 a barrel. Over the week Brent rose by 3.4% with Nymex up 3.5%.
Base metal prices fell by between 0.7-3.4% on Friday with tin down the least and aluminium down the most. Over the week, metals rose by between 0.6-4.5% with lead up the most.
The gold futures price rose by US$8.30 an ounce or 0.5% to US$1,815.50 an ounce. Spot gold was trading near US$1,802 an ounce at the US close. Over the week gold rose by US$24.30 or 1.4%. Iron ore futures fell by US$1.15 or 1.0% to US$109.86 a tonne. Over the week iron ore rose by US75 cents or 0.7%.
Published by CommSec