In US economic data, non-farm payrolls (jobs) rose by 223,000 in December (survey: +200,000). The jobless rate fell from 3.7% to 3.5% (survey: 3.7%). Average hourly earnings rose by 0.3% (survey: +0.4%) to stand 4.6% up on the year (survey: 5%). The ISM services gauge fell from 56.5 to 49.6 in December (survey: 55). This was the first contraction in services activity (a reading below 50) for 2½ years.
European sharemarkets were firmer on Friday, hitting sevenmonth highs. The continent-wide FTSEurofirst 300 index rose by 1.1% to be up 4.6% on the week. And the UK FTSE gained 0.9% on Friday. The basic resources index rose by 2.5% in response to higher metal prices while both Energy and Technology sectors gained 1.8%.
US sharemarkets rose on Friday in response to the latest economic data. While jobs rose as expected and unemployment fell, the services sector contracted for the first time since 2020. The Dow Jones index rose by 701 points or 2.1%; the S&P 500 index rose by 2.3%; and the Nasdaq index lifted by 264 points or 2.6%. Over the week the Dow rose 1.5% with the S&P 500 up 1.4% and the Nasdaq up 1.0%.
US government bonds rose sharply on Friday (yields lower). Atlanta Fed President Raphael Bostic said on Friday that she “would be comfortable with either a 50 or a 25 (basis point increase)” at the next policy meeting. US 10-year Treasury yields fell 16 points to 3.56%. And US 2-year Treasury yields fell by 20 points to 4.25%. Over the week US 10-year bond yields fell by 27 points and US 2-year bond yields fell by 15 points.
Major currencies were firmer against the US dollar in European and US trade. The Euro rose from lows near US$1.0480 to highs near US$1.0647 and was near highs at the US close. The Aussie dollar rose from lows near US67.20 cents to highs near US68.87 cents and was near US68.75 cents at the US close. And the Japanese yen eased from 134.70 yen per US dollar to JPY132.00 and was near the strongest levels at the US close.
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Global oil prices were little-changed on Friday. Investors responded to mixed economic data and a stronger US dollar. Saudi Arabia also reportedly lowered prices for Arab light crude it sells to Asia. The Brent crude oil price fell by US12 cents or 0.2% to US$78.57 a barrel. But the US Nymex crude oil price rose by US10 cents or 0.1% to US$73.77 a barrel. Over the week Brent crude fell by US$7.34 or 8.5% and US Nymex fell by US$6.49 or 8.1%.
Base metal prices were firmer on Friday. Copper rose by 2.3% while aluminium futures rose by 1.0%. Over the week copper rose by 2.7% while aluminium fell by 5.2%.
The gold futures price rose by US$29.10 or 1.6% to US$1,869.70 an ounce. Spot gold was trading near US$1,866
an ounce at the US close. Over the week gold rose by US$43.50 or 2.4%. Iron ore futures rose by US$1.60 a tonne or 1.4% to US$116.57 a tonne. Over the week iron ore rose by US$5.29 or 4.8%.
Ahead: In Australia, building approvals data is scheduled on Monday. On Wednesday the monthly consumer price index will be released.
In the US, data on consumer inflation expectations is released with consumer credit on Monday. Later in the week data on US consumer prices is released on Thursday. And China inflation data is released the same day.
Originally published by CommSec