In US economic data, non-farm payrolls (employment) rose by 225,000 in January (forecast +160,000). The unemployment rate rose from 3.5% to 3.6% (forecast 3.5%) as the participation rate rose from 63.2 per cent to 64.4 per cent. Average hourly earnings rose by 0.2% (forecast +0.3%) to be up 3.1% on the year. Consumer credit rose by US$22.06 billion in December.
US share markets eased from record highs on Friday as investors booked profits and squared positions at the end of the week. Employment data encouraged investors but some questioned whether stocks had risen too far, too fast. The earnings season is halfway complete and quarterly earnings for S&P500 companies are estimated to be up 2.3%. At the close of trade, the Dow Jones index was lower by 277 points or 0.9%. The S&P500 index lost 0.5% and the Nasdaq index lost 52 points or 0.5%. Over the week the Dow rose 3%, S&P 500 rose 3.2% and the Nasdaq rose 4%.
US treasuries rose (yields lower) as investors squared positions at the end of the week. Economic data beat forecasts. But investors sold equities on Friday after recording solid gains over the week and bought bonds. US 2-year yields fell by 4 points to 1.40% and US 10- year yields fell 6 points to near 1.58%. Over the week US 2-year yields rose by 7 points with US 10-year yields up 6 points.
European share markets eased on Friday from record highs as investors squared positions ahead of the weekend. Basic materials fell 2.2% and autos lost 1.7%, The pan-European STOXX 600 index fell by 0.3% but it was still the best weekly gain since November 2018. The German Dax and the UK FTSE lost 0.5%. In London trade, shares of Rio Tinto fell by 2.4% and BHP lost 2.7%.
The Euro and commodity currencies were weaker against the US dollar in European and US trade. The Euro fell from around US$1.0985 to near US$1.0940 and was around US$1.0945 in late US trade. The Aussie dollar fell from near US67.25 cents to US66.62 cents and was near US66.72 cents in late US trade. But the Japanese yen lifted from 109.97 yen per US dollar to JPY109.52 and was near JPY109.72 in late US trade.
Global oil prices eased by around 1% on Friday. Russia said that it needed more time to decide if the OPEC+ group should cut oil output further to support prices in the wake of the coronavirus outbreak. The number of oil rigs operating in the US rose by 1 last week to 676. Brent crude fell by US46 cents or 0.8% to US$54.47 a barrel. The US Nymex price fell by US63 cents or 1.2% to US$50.32 a barrel. Over the week Brent fell by 6.3% and Nymex lost 2.4% - the fifth straight weekly declines.
Base metal prices fell by between 0.8-3.1% on Friday with aluminium down the least and zinc and tin down the most. Over the week metals fell by between 1.4-9.0% with nickel down the least and zinc down the most. Copper lost 4.3%.
The gold futures price rose by US$3.50 an ounce or 0.2% to US$1,568.60 an ounce. Spot gold was trading near US$1,570 an ounce in late US trade. Over the week gold fell by US$14.30 or 0.9%. Iron ore rose by US50 cents or 0.6% to US$82.65 a tonne. Over the week iron ore rose by 10 cents or 0.1%.
The Chinese government has unveiled fiscal stimulus measures to help businesses affected by coronavirus.
In Australia, no major data is expected. In the US, data on consumer inflation expectations is released.
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