In US economic data, personal income rose by 0.4% in April (survey: +0.5%) with spending up 0.9% (survey: +0.8%). The key inflation measure – the core personal consumption expenditure (PCE) deflator – rose by 0.3% (survey: +0.3%) in April to be up 4.9% on the year (survey: +4.9%). Wholesale inventories rose by 2.1% in April (survey: +2%). Retail inventories ex autos rose 1.7% in April (survey: +1.5%). The goods trade deficit narrowed from US$125.9bn to US$105.9bn in April (survey: -US$114.8bn). The final University of Michigan consumer sentiment index fell from 65.2 to an 11-year low of 58.4 in May (survey: 59.1).

European sharemarkets advanced on Friday. Technology led gains, up 3.3%, with industrials up 2.3%. The pan-European STOXX 600 index rose by 1.4% to be up 3% on the week. The German Dax index lifted by 1.6% and the UK FTSE index gained 0.3%. In London trade, shares in Rio Tinto rose by 1.3% while BHP shares rose by 3.5%.

US sharemarkets climbed on Friday on expectations that inflation had peaked. Shares in computer hardware firm Dell rose 12.9% on better-than-expected earnings. Clothing retailer Gap lost 6.6% after trimming profit forecasts but shares in American Eagle Outfitters rose 4.3% despite similarly downgrading its outlook. The Dow Jones index closed higher by 576 points or 1.8%. The S&P 500 index rose by 2.5%. And the Nasdaq index gained 390 points or 3.3%. Over the week the Dow rose 6.2% and the S&P 500 rose 6.6% – both posting the biggest gains since November 2020. And the Nasdaq gained 6.8%.

US treasuries rose on Friday (yields lower). US 10-year yields fell by around 1 point to near 2.74%. And US 2-year yields fell 1 point to near 2.48%. Over the week US 10-year yields fell by 5 points and US 2-year yields fell by 10 points.

Major currencies were mixed against the US dollar in European and US trade. The Euro fell from highs near US$1.0755 to lows near US$1.0695 and was near US$1.0725 at the US close. The Aussie dollar firmed from lows near US71.25 cents to highs near US71.65 cents and was near US71.60 cents at the US close. And the Japanese yen held between 126.75 yen per US dollar and JPY127.20 and was near JPY127.11 at the US close.

Global oil prices advanced on Friday. Traders expect that strong global demand for crude products will continue. The Brent crude price rose by US$2.03 or 1.7% to US$119.43 a barrel. And the US Nymex crude price added 98 cents or 0.9% to US$115.07 a barrel. Over the week Brent rose by 6.1% with Nymex up 1.6%.

Base metal prices rose by as much as 4% on Friday with nickel up the most. Over the week, aluminium, lead and tin fell with aluminium down 3.1%. Other metals rose with zinc up 3.8%.

The gold futures price rose by US$3.70 or 0.2% to US$1,851.30 an ounce. Spot gold was trading near US$1,853 an ounce at the US close. Over the week gold rose by US$9.20 or 0.5%. The iron ore futures price rose by 94 cents or 0.7% to US$133.41 a tonne. Over the week iron ore fell by US95 cents or 0.7%. Ahead: US financial markets are closed in observance of Memorial Day

Originally published by CommSec