22 November 2019
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Good morning, Australia

Craig James
29 July 2019

How’dy USA

In US data, the economy grew at 2.1% annual pace in the June quarter (forecast +1.8%). The inflation measure - the core personal consumption deflator - rose at a 1.8% annual pace (forecast 2.0%).

US share markets rose on Friday with technology leading the way. On earnings news, shares in Alphabet (Google) rose 9.6% and shares in Twitter rose 8.9% while Amazon fell 1.6% and Intel fell 1.1%. Shares in McDonalds rose 2.1% to record highs after sales beat forecasts. Traders look hopefully towards new US-China trade talks on Tuesday. The Dow Jones rose by 51 points or 0.2% with the S&P500 up 0.7% to record highs and the Nasdaq gained 92 points or 1.1% to record highs. Over the week the Dow rose by 0.1% with the S&P 500 index up 1.7% and the Nasdaq up 2.3%.

US treasuries fell on Friday (yields higher). The US economy grew slightly faster than forecasts in the June quarter. US 2-year yields rose by 1 point to near 1.87% and US 10-year yields rose by 1 point to near 2.08%. Over the week US 2-year yields rose 3 points and US 10-year yields rose by 5 points.

Bonjour Europe

European share markets rose on Friday. Shares of Vodafone rose 10.6% on plans to separate its towers unit in Europe into a new company worth upwards of 18 billion euros ($20 billion). Media stocks also gained 2.7%. Shares in Nestle rose 1.8% in reaction to earnings news. The pan-European STOXX600 index rose by 0.3%, the German Dax was up by 0.5% and the UK FTSE lifted 0.8%. In London trade, shares of Rio Tinto rose by 0.7% but BHP lost 0.2%.

Hello World!

Global oil prices rose by up to 0.3% on Friday. Worries about the safety of vessels travelling through the Strait of Hormuz still dominate. The US economy also slowed by less than feared in the June quarter. The number of oil rigs in operation in the US fell by 3 to 776 in the latest week. The Brent crude price rose by US7 cents or 0.1% to US$63.46 a barrel. And the US Nymex price rose by US18 cents or 0.3% to US$56.20 a barrel. Over the week Brent rose 1.6% and Nymex rose 1.0%.

Major currencies were weaker against the US dollar in US and European trade compared with the end of Asian trade. The Euro fell from near US$1.1150 to US$1.1110 and was near US$1.1125 in late US trade. The Aussie dollar fell from near US69.45 cents to US69.00 cents and was near US69.10 cents in late US trade. The Japanese yen held between 108.58 yen per US dollar and JPY108.79 and was near JPY108.66 in late US trade.

Base metal prices were mixed on the London Metal Exchange on Friday. Nickel rose 0.2% and zinc rose 0.5%. But other metals fell by 0.8-3.2% with lead down the most. Over the week zinc rose 1.4% and lead rose 0.6% but other metals lost up to 4.2% with nickel down the most.

The gold futures price rose by US$4.60 or 0.3% to US$1,419.30 an ounce. The spot gold price was trading near US$1,418 an ounce in late US trade. Over the week gold lost US$7.40 or 0.5%. Iron ore rose by US$1.75 or 1.5% to US$118.75 a tonne. Over the week iron ore fell US$3.10 or 2.5%.

G’day Australia

In Australia, the CommSec State of the States report is released. In the US, the Dallas Federal Reserve manufacturing index is released.

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