In US economic data, existing home sales rose by 2.5% in May to a 5.34 million annual rate (forecast 5.25m). The Markit flash manufacturing index eased from 50.5 to 50.1 in June (forecast 50.4) with services down from 50.9 to 50.7 (forecast 51.0). US President Donald Trump announced over the weekend that the US will impose major new sanctions on Iran on Monday.
US share markets fell on Friday as traders booked profits at the end of the week. Traders watched relations between the US and China. Also, President Trump called off retaliatory strikes following Iran's downing of a US drone. The Dow Jones index fell by 34 points or 0.1% after being up 154 points in early trade. The S&P500 index fell by 4 points or 0.1% from record highs and the Nasdaq fell by almost 20 points or 0.2%. Over the week the Dow rose by 2.4%, the S&P 500 rose by 2.2% and the Nasdaq rose by 3%.
US treasuries were weaker on Friday (yields higher) as traders took profits and squared positions at the end of the week. In the coming week, US$113 billion of Treasuries will be auctioned. US 2- year yields rose by 4 points to 1.77% and US 10-year yields were up by 6 points to 2.06%. Over the week US 2-year yields fell by 7 points and US 10-year yields fell by 3 points.
Major currencies were mixed against the US dollar in US and European trade compared with the end of Asian trade. The Euro rose from US$1.1280 to US$1.1375 and was around US$1.1365 in late US trade. The Aussie dollar held between US69 cents and US69.35 cents and was near US69.25 cents in late US trade. And the Japanese yen held between 107.10 yen per US dollar and JPY107.72 and was near JPY107.30 in late US trade.
Global oil prices rose by around 1% on Friday. Traders continue to focus on tensions between the US and Iran. Also, US gasoline futures rose 4% following a fire at a large refinery in Philadelphia - the biggest on the East Coast. The Brent crude price rose by US75 cents or 1.2% to US$65.20 a barrel. And the US Nymex rose by US36 cents or 0.6% to US$57.43 a barrel. Over the week Brent rose by 5.1% while Nymex rose by 9.4%.
Base metal prices fell by up to 1.7% on Friday with nickel down the most while copper fell by just 0.1%. Over the week copper rose by 2.8% and nickel rose by 1.9% but tin lost 1.5% and zinc lost 0.6%.
The gold futures price rose by US$3.20 an ounce or 0.2% to US$1,396.90 an ounce. The spot gold price was trading near US$1,399 an ounce in late US trade. Over the week gold rose by US$54.80 or 4.1%. Iron ore fell by US$1.15 or 1.0% to US$116.40 a tonne. Over the week iron ore rose by US$7.00 or 6.4%.
In Australia, the Reserve Bank Governor participates in a panel discussion. In the US the Chicago Federal Reserve National Activity index is released with the Dallas Federal Reserve Manufacturing index.
If you liked this article you'll love the Switzer Report, our newsletter and website for trustees of self-managed super funds. Click here for a FREE trial and to hear more of Peter’s expert commentary and advice.