22 November 2019
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Good morning, Australia

Craig James
19 August 2019

How’dy USA

In US data, non-farm payrolls (employment) rose by 164,000 in July (forecasts +160,000). Job gains in May and June were trimmed by 41,000. The jobless rate was steady at 3.7% as expected. Hourly earnings rose 0.3% (forecast +0.2%). Consumer sentiment rose from 98.2 to 98.4 in July (forecast 98.5). The trade deficit eased from US$55.3 billion to $55.2 billion in June (forecast $54.6bn).

US share markets fell again on Friday as investors focussed on the US-China trade war. Tech stocks were hard hit with the Philadelphia Semiconductor index down 1.6%. Eight of 11 S&P 500 sectors fell. Shares in Exxon and Chevron fell slightly after earnings announcements. The Dow Jones lost 98 points or 0.4% with the S&P500 down 0.7%, while the Nasdaq fell by 107 points or 1.3%. Over the week the Dow fell by 2.6% with the S&P 500 index down by 3.1% and the Nasdaq lost 3.9%.

US treasuries rose on Friday (yields lower). Bonds were favoured over stocks and economic data was generally benign. US 2-year yields fell by 1 point to near 1.71% and US 10-year yields fell by 5 points to near 1.84%. Over the week US 2-year yields fell by 16 points and US 10-year yields fell by 24 points.

Bonjour Europe

European share markets fell on Friday in reaction to the lift in US tariffs on Chinese goods. Trade exposed sectors such as chip makers, miners and automakers fared worst. Shares in Royal Bank of Scotland fell 6.5% after a profit warning. The pan-European STOXX600 index fell by 2.5%, the German Dax fell by 3.1% and the UK FTSE lost 2.3%. In London trade, shares of Rio Tinto fell by 3.4% and BHP lost 4.8%.

Hello World!

Global oil prices rebounded on Friday after falling 7-8% on Thursday in response to the US tariff news. Supporting prices was data showing that the number of oil rigs in operation in the US fell by 6 to 770 in the latest week. Data also showed that China resumed purchases of US oil. The Brent crude price rose by US$1.39 or 2.3% to US$61.89 a barrel. And the US Nymex price rose by US$1.71 or 3.2% to US$55.66 a barrel. Over the week Brent fell by 2.5% and Nymex lost 1.0%.

Base metal prices fell by between 0.7-2.9% on the London Metal Exchange on Friday. Aluminium fell the least with copper down the most. Over the week lead fell by 5.4% and zinc lost 4.4% but nickel rose 2.7%.

The gold futures price rose by US$24.70 or 1.7% to US$1,445.60 an ounce. The spot gold price was trading near US$1,440 an ounce in late US trade. Over the week gold rose by US$26.30 or 1.9%. Iron ore fell by US$5.45 or 4.8% to US$108.45 a tonne. Over the week iron ore fell by US$10.30 or 8.7%.

G’day Australia

In Australia, new vehicle sales data may be issued with the services purchasing managers index. A Bank Holiday is observed in NSW. In China the Caixin services index is issued. In the US, the ISM services index is released with new vehicle sales data.

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