In US economic data, the economy added 261,000 nonfarm payroll jobs in October (survey: +195,000). But the unemployment rate edged higher from 3.5% to 3.7% in October (survey: 3.6%) with the labour force participation rate lower at 62.2%. Average hourlyearnings rose by 0.4% in October to a 4.7% annual pace (survey: 4.7%), down from the 5% rate in September.
European sharemarkets rose on Friday on hopes the US Federal Reserve will scale back future rate hikes. Also it was reported that “China will make substantial changes to its ‘dynamic-zero’ COVID-19 policy in coming months.” Shares in Adidas soared 21.4% on reports that the outgoing Puma chief executive is set to become the new Adidas head. Basic resources rose 5.3%, automakers rose by 3.7% and personal & household goods rose by 3.9%. The continent-wide FTSEurofirst 300 index was up by 1.8%. The UK FTSE 100 index rose by 2.0%.
US sharemarkets posted firm gains on Friday. A mixed jobs report raised hopes that the Federal Reserve could scale back future rate hikes. At the close of trade, the Dow Jones index was up 402 points or 1.3%. The S&P 500 index rose by 1.4% and the Nasdaq index lifted by 132 points or 1.3%. Over the week, the Dow lost 1.4%; the S&P 500 lost 3.3%; and the Nasdaq lost 5.6%.
US treasuries were mixed on Friday. Traders dissected jobs data and comments by Federal Reserve officials. Chicago Fed President Charles Evans said it was possible for the Fed to be “thinking” about pausing even if it’s a year from now. According to the CME’s FedWatch Tool, traders were now pricing in about a 62% chance of a 50 basis point hike at the next Fed meeting. US 10-year yields rose around 4 points to near 4.16%. And US 2-year yields fell by around 4 points to near 4.66%. Over the week US 10-year yields rose by 15 points and US 2-year yields rose by 16 points.
Major currencies were firmer against the US dollar in European and US trade. The Euro rose from lows near US$0.9755 to highs near US$0.9965 and was near US$0.9960 at the US close. The Aussie dollar rose from lows near US63.30 cents to highs near US64.80 cents and was near US64.65 cents at the US close. And the Japanese yen lifted from near 148.05 yen per US dollar to JPY146.55 and was near JPY146.60 at US close.
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Global oil prices rose by as much as 5% on Friday. Hopes for a scale back of US rate hikes and speculation of an easing of Covid19 curbs in China drove oil prices higher. The Brent crude oil price rose by US$3.90 or 4.1% to US$98.57 a barrel. The US Nymex crude oil price rose by US$4.44 or 5.0% to US$92.61 a barrel. Over the week, Brent crude rose by US$2.80 or 2.9%. Nymex crude rose by US$4.71 or 5.4%.
Base metal prices were firmer on Friday with gains as much as 7.1% (copper). But lead was flat. Over the week metals rose by as much as 7.7% (nickel) but lead rose just 0.1%.
The gold futures price rose by US$45.70 an ounce or 2.8% to US$1,676.60 an ounce. Spot gold was trading near US$1,680 an ounce at the US close. Over the week gold rose by US$31.80 or 1.9%. Iron ore futures rose by US$1.79 a tonne or 2.1% to US$85.16 a tonne. Over the week iron ore fell by US$7.85 or 8.4%.
Originally published by CommSec