How’dy USA

In US economic data, personal income rose 0.2% in December (forecast: +0.3%) with spending up 0.3% as expected. The inflation measure - core personal consumption deflator - was up 1.6% over the year as expected. The Chicago purchasing managers index fell from 48.2 to 42.9 in January. Consumer confidence rose from 99.1 to 99.8 in January (forecast: 99.1).

US share markets fell on Friday as worries about the spread of the coronavirus caused investors to book profits at the end of the week and month. Shares in Amazon rose 7.4% on better-than expected sales results. Shares in Visa lost 4.4% after quarterly revenue missed estimates. The Dow Jones index fell by 603 points or 2.1%. The S&P500 index fell by 1.8% and the Nasdaq lost 148 points or 1.6%. Over the week the Dow lost 2.5%, S&P 500 lost 2.1% and the Nasdaq lost 1.8%.

US treasuries were firmer on Friday (yields lower). Investors drifted to 'safe-haven' assets such as government bonds, gold and the yen on concerns about the economic effects of the coronavirus. US 2-year yields fell by 7 points to 1.319% and US 10-year yields fell by 5 points to near 1.505%. Over the week US 2-year yields fell 27 points and 10-year yields fell 17 points.

Bonjour Europe

European share markets fell on Friday as investors dissected the economic impact of the coronavirus. Miners lost 1.6% and travel & leisure stocks fell 0.7%. The Eurozone economy grew only 0.1% in the December quarter, less than the 0.2% expected. The panEuropean STOXX600 index lost 1.1% to be down 3% on the week. The German Dax and the UK FTSE both fell by 1.3%. In London trade, shares of Rio Tinto fell by 2% and BHP lost 1.9%.

Hello World!

Major currencies were mixed against the US dollar in European and US trade. The Euro rose from around US$1.1015 to near US$1.1095 and ended US trade near the highs. But the Aussie dollar fell from near US67.20 cents to US66.80 cents and was near US66.90 cents in late US trade. The Japanese yen rose from 109.10 yen per US dollar to JPY108.30 and was near JPY108.40 in late US trade.

Global oil prices fell by up to 1.1% on Friday. The Russian energy minister said Russia was prepared to bring forward its next meeting with OPEC oil countries from March into February. Brent crude fell by US13 cents or 0.2% to US$58.16 a barrel. The US Nymex price fell by US58 cents or 1.1% to US$51.56 a barrel. Over the week Brent lost 4.2% and Nymex lost 4.9%.

Base metal prices were higher by up to 3.3% on the London Metal Exchange on Friday with lead up the most. But zinc rose only 0.3% while aluminium lost 0.7% and copper lost 0.3%. Over the week metals fell up to 6% with zinc and copper down the most.

The gold futures price fell by US60 cents an ounce to US$1,582.90 an ounce. Spot gold was trading near US$1,590 an ounce in late US trade. Over the week gold rose US$11 or 0.7%. Iron ore fell by US45 cents or 0.5% to US$82.55 a tonne. Over the week iron ore fell by US$9.50 or 10.3%

The People's Bank of China said Sunday it will use reverse repurchase agreements to supply 1.2trn yuan of liquidity on Monday with the net figure totalling 150bn yuan (US$21.7bn).

G’day Australia

In Australia, the inflation gauge is issued with CoreLogic home prices, building approvals, job ads and CBA & AiGroup manufacturing indexes. In China, data on industrial profits is released with Caixin manufacturing. In the US, the ISM manufacturing survey is released with construction spending.