How’dy USA

US Federal Reserve chair Jerome Powell said "the coronavirus poses evolving risks to economic activity. The Federal Reserve is closely monitoring developments and their implications for the economic outlook. We will use our tools and act as appropriate to support the economy."

In US data, personal income rose 0.6% in January (forecast +0.3%) with spending up 0.2% (forecast +0.3%). The inflation measure - core consumption deflator - rose 0.1% in January to be up 1.6% on the year (forecast +1.7%). The Chicago purchasing managers index rose from 42.9 to 49.0 (forecast 45.9). Consumer sentiment rose from 99.8 to 101.0 in February.

US share markets finished mixed on Friday. The Dow Jones index fell by 357 points or 1.4%, rallying 640 points in the last 15 minutes and after being down 1085 points at the lows. The S&P500 index was lower by 0.8% but the Nasdaq was higher by less than 1 point and less than 0.1%. On the week the Dow fell by 12.4% with the S&P 500 down 11.5% and the Nasdaq lower by 10.5%.

US treasury bond prices rose on Friday (yields lower) as investors favoured 'safe haven' assets like bonds. US 2-year yields fell by 17 points to 0.93% and US 10-year yields fell by 14 points to near 1.16%. Over the week US 2-year yields fell by 42 points and US 10-year fell by 31 points.

Bonjour Europe

European share markets were lower by 3-4% on Friday. The pan European STOXX 600 index fell by 3.5% to fresh 4-month lows to be down more than 13.2% from recent highs. Chemicals, insurance and telecom stocks led the falls. The German Dax lost 3.9%. The UK FTSE fell by 3.2%. In London trade, shares of Rio Tinto fell by 1.9% and BHP lost 4.8%.

Hello World!

Major currencies were mixed against the US dollar in European and US trade. The Euro fell from near US$1.1050 to US$1.0950 and was around US$1.1025 at US close. The Aussie dollar fell from near US65.45 cents to US64.35 cents and was near US65.10 cents at US close. And the Japanese yen lifted from near 109.05 yen per US dollar to JPY107.50 and was near JPY108.05 at US close. This morning the Aussie is US64.60c, yen at JPY107.05 and Euro US$1.1030.

Global oil prices fell for the sixth straight day, dropping by up to 5% on Friday to 14-month lows. Brent crude fell by US$1.66 or 3.2% to US$50.52 a barrel. The US Nymex price fell by US$2.33 or 4.9% to US$44.76 a barrel. Over the week Brent fell by 13.6% - the biggest fall since January 2016 - with Nymex down 16.1% - the biggest fall in 11 years.

Base metal prices were mixed on Friday. Lead rose 2.4% with zinc up 0.6% and aluminium and copper rose 0.3%. But tin lost 0.3% and nickel lost 1.0%.

The gold futures price fell by US75.90 an ounce or 4.6% to US$1,564.10 an ounce. Spot gold was trading near US$1,585 an ounce in late US trade. Over the week gold fell 4.9%. Iron ore fell by US$1.50 or 1.8% to US$83.90 a tonne. Over the week iron ore fell by US$7.90 or 8.6%.

In Chinese data, the manufacturing purchasing managers index fell from 50 to a record low of 35.7 in February with services down from 54.1 to a record low of 29.6.

G’day Australia

In Australia, the CoreLogic home price index is released with ABS business indicators, CBA and AiGroup manufacturing gauges. In the US, the ISM manufacturing index is released.