How’dy USA

In US data, non-farm payrolls rose by 273,000 in February (forecast +175,000). There were upward revisions of 85,000 jobs to December and January data. Unemployment fell from 3.6% to 3.5%. Average hourly earnings rose 0.3% as expected to be up 3% on the year. The trade deficit fell from US$48.6 billion to US$45.3bn in January. Exports fell 0.4% and imports fell by 1.6%.

US share markets rallied into the close as traders squared positions on the risk that there could be fresh developments on COVID-19 and the response by finance officials over the weekend. The banks index fell by 4.7%. The Dow Jones was down 895 points at one stage and rallied 623 points in the last 40 minutes of trade. At the close, the Dow Jones index was lower by 257 points or 1.0% The S&P500 index lost 1.7% and the Nasdaq was down by 163 points or 1.9%. Over the week the Dow rose by 1.7%, the S&P 500 rose by 0.55% and the Nasdaq rose by 0.1%.

US treasury bond prices rose on Friday (yields lower). Investors largely ignored the data showing strong job gains in February, focusing on the economic impact of COVID-19. US 2-year yields fell by 6 points to 0.52%. And US 10-year yields fell by 15 points to near 0.77%, off record lows of 0.66%. Over the week US 2-year yields fell by 35 points. US 10-year yields also fell 35 by points.

Bonjour Europe

European share markets slumped on Friday on continued concerns about the impact of the COVID-19 coronavirus on business activity. Oil & gas stocks fell 5.5% in response to a slump in the oil price. Banks lost 3.3%. The pan-European STOXX 600 index fell by 3.7%. The German Dax lost 3.4%; the UK FTSE fell by 3.6%. In London trade, shares of Rio Tinto fell 3.9%; BHP lost 5.2%.

Hello World!

In Chinese economic data, exports fell 17.2% in the two months to February compared with a year earlier (forecast -14%) while imports fell 4% (forecast -15%). A deficit of US$7.09 billion was recorded (forecast surplus $24.6bn).

Major currencies were firmer against the US dollar in European and US trade. The Euro rose from near US$1.1220 to around US$1.1355 and was around US$1.1285 at the US close. The Aussie dollar rose from near US65.90 cents to US66.55 cents and was near US66.45 cents at the US close of trade. And the Japanese yen lifted from near 106.00 yen per US dollar to JPY105.00 and was near JPY105.30 in afternoon US trade. This morning the Euro is US$1.1325; Aussie US66.10c; Yen is JPY104.55.

Global oil prices slumped by 10% on Friday - the biggest daily loss in 11 years. Russia refused to back OPEC production cuts. Russia and OPEC then ended a 3-year production agreement. According to the Russian Energy minister "From April 1 neither OPEC nor non-OPEC have restrictions." Brent crude fell by US$4.72 or 9.4% to US$45.27 a barrel. The US Nymex price fell by US$4.62 or 10.1% to US$41.28 a barrel.

Base metal prices were weaker by between 0.4-2.4% on Friday with nickel down the least and aluminium down the most. Lead bucked the trend, up by 0.6%. Over the week metals were mixed with nickel up 5% but zinc fell by 2.2%.

The gold futures price rose by US$4.40 an ounce or 0.3% to US$1,670.80 an ounce. Spot gold was trading near US$1,674 an ounce in late US trade. Over the week gold rose by US$106.70 or 6.8%. Iron ore fell by US$2.40 or 2.6% to US$89.50 a tonne. Over the week iron ore rose by US$5.60 or 6.7%.

G’day Australia

In Australia, no major economic data is expected. In the US, data on consumer inflation expectations is issued.