In the US, nonfarm payrolls (employment) lifted by 517,000 in January (survey: +189,000). The jobless rate fell from 3.5% to 3.4% last month (survey: 3.6%) – the lowest since May 1969. The participation rate rose from 62.3% to 62.4% (survey: 62.3%). Average hourly earnings rose 0.3% as expected with annual growth down from 4.8% to 4.4% (survey: 4.3%). The ISM services index rose from 49.2 to 55.2 in January (survey: 50.5).
European sharemarkets closed higher on Friday with the healthcare sector up 1.5%. The continent-wide FTSEurofirst 300 index gained 0.5% to 9-month highs. And the UK FTSE 100 index rose 1.0%, hitting a record high in the session.
US sharemarkets were weaker on Friday as investors digested a batch of strong economic readings. After reporting earnings, shares in Apple rose 2.4% while Amazon fell 8.4%, Alphabet fell by 2.7% and Ford fell by 7.6%. At the close of trade, the Dow Jones index fell by 128 points or 0.4%. The S&P 500 index lost 1% and the Nasdaq index fell by 194 points or 1.6%. Over the week the Dow fell 0.2% but the S&P 500 rose 1.6% and the Nasdaq rose by 3.3%, posting its fifth-straight winning week.
US government bonds fell on Friday (yields sharply higher). In response to strong economic data, investors expect the Federal Reserve to continue lifting rates. US 10-year treasury yields rose by 12 points to 3.52%. And US 2-year treasury yields rose by 20 points to 4.29%. Over the week, US 10-year yields were flat and US 2-year yields rose by 8 points.
Major currencies were weaker against the US dollar in European and US trade. The Euro fell from highs near US$1.0940 to lows near US$1.0790 and was near session lows at the US close. The Aussie dollar fell from highs near US70.70 cents to lows near US69.15 cents and was near US69.20 cents at the US close. And the Japanese yen eased from near 128.30 yen per US dollar to around JPY131.20 and was near session lows at the US close.
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Global oil prices fell by around 3% in volatile trade on Friday. Investors worried that the strong US jobs report would lead to further rate hikes. Also investors were uncertain about the impact of European Union price caps on Russian refined oil products. The Brent crude oil price shed US$2.23 or 2.7% to US$79.94 a barrel. And the US Nymex crude oil price fell by US$2.49 or 3.3% to US$73.39 a barrel. Over the week Brent crude slid 7.8% and Nymex crude fell by 7.9%.
Base metal prices fell on Friday. The copper futures price fell by 0.8%. And the aluminium futures price slid 2.2%. Reuters notes that other base metals also fell, with zinc down 4.8% in response to a surge in inventories. Over the week copper fell by 3.8% and aluminium fell 3.4%.
The gold futures price fell by US$54.20 or 2.8% to US$1,876.60 an ounce. Spot gold was trading near US$1,865 an ounce at the US close. Over the week gold fell by US$52.80 an ounce or 2.7%. Iron ore futures rose by US$1.31 or 1.1% to US$125.26 a tonne. Over the week iron ore rose by US$2.56 or 2.1%.
Ahead: In Australia, December quarter retail trade figures are scheduled with the monthly Melbourne Institute inflation gauge. Nick Scali is scheduled to release earnings results.
No major economic data is scheduled in both the US and China.
In US company news, Activision Blizzard and Pinterest are expected to issue an update on earnings.
Originally published by CommSec