In US economic data, the producer price index (PPI) rose by 0.3% in November (survey: +0.2%). The annual growth rate of the PPI fell from 8.1% to 7.4% in November (survey: 7.2%). The core PPI (ex-food and energy) was up 0.4% in November (survey:+0.2%). Annual growth of the core PPI eased from 6.8% to 6.2%in November (survey: 5.9%). The University of Michigan consumer sentiment index rose from 56.8 to 59.1 in December (survey: 57).
European sharemarkets rose on Friday, snapping a five-day losing streak. Construction and material stocks gained 1.8%, with China’s easing of its strict Covid curbs aiding sentiment. Shares of Credit Suisse jumped 6.8% after the bank raised 2.24 billion Swiss francs. The continent-wide FTSEurofirst 300 index gained 0.8% but was down 0.9% over the week. And the UK FTSE 100 rose 0.1% but fell 1.1% for the week.
US sharemarkets tumbled on Friday as investor worries about inflation and interest rate hikes persisted after US producer prices rose more-than-expected in November. Shares of apparel company Lululemon Athletica slid 12.9% following a disappointing profit forecast. Chevron shares dipped 3.2% as crude oil prices eased. But Netflix shares gained 3.1% after Wells Fargo upgraded the video streaming giant to “overweight” from “equal weight”. At the close of trade, the Dow Jones index fell by 305 points or 0.9%. The S&P 500 index dipped by 0.7% and the Nasdaq index shed 77 points or 0.7%. For the week, the Dow lost 2.8%, S&P 500 dropped 3.4% and the Nasdaq shed 4%.
US government bonds were weaker on Friday (yields higher), spurred by a higher-than-expected November PPI, with October readings revised slightly higher. US 10-year Treasury yields rose by 9 points to 3.59%. And US 2-year Treasury yields lifted by 3 points to 4.34%. For the week, 10-year yields rose by 8 points with 2-year yields up by 6 points.
Major currencies were mixed against the US dollar in European and US trade. The Euro fell from highs near US$1.0587 to lows near US$1.0515 and was near US$1.0530 at the US close. The Aussie dollar rose from lows near US67.49 cents to highs near US68.12 cents and was near US67.95 cents at the US close. And the Japanese yen eased from near 135.59 yen per US dollar to JPY136.84 and was near JPY136.56 at the US close.
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Global oil prices fell in a volatile trading session on Friday. Prices rose earlier in the session after President Vladimir Putin said Russia could cut output in response to a price cap on its crude oil exports. But news of a partial restart on the Keystone Pipeline in the US undid those gains. The Brent crude oil price fell by US5 cents or 0.1% to US$76.10 a barrel. And the US Nymex crude oil price slid US44 cents or 0.6% to US$71.02 a barrel. Both crude benchmarks posted weekly losses of around 11% each. It was the biggest weekly decline since April for the US Nymex and since
early August for the Brent.
Base metal prices were lower on Friday. While copper was little changed, down just 0.1%, aluminium fell by 1.3%. Over the week, copper gained 0.7% and aluminium lost 2.8%.
The gold futures price rose by US$9.20 an ounce or 0.5% to US$1,810.70 an ounce. Spot gold was trading near US$1,797 an ounce at the US close. Over the week, gold rose by US$1.10 an ounce or 0.1%. Iron ore futures rose by US99 cents a tonne or 0.9% to US$110.48 a tonne. For the week,iron ore lifted by US$3.04 a tonne or 2.8%.
Ahead: In the US, consumer inflation expectations data andthe monthly budget statement are both scheduled.
Originally published by CommSec
