Howd’y USA

In US economic data, industrial production rose by 0.3% in December (forecast +0.2%) to be up 4% on the year. Manufacturing production rose 1.1% in December. Consumer sentiment fell from 98.3 to 90.7 in January (forecast (97.0). 

US share markets rose solidly on reports of an easing of trade tensions between the US and China. There were broad-based gains with industrials doing best. But shares of Netflix fell by 4% after the steaming company revealed lower-than-expected earnings in the quarter. At the close of trade, the Dow Jones index was higher by 336 points, or 1.4%. The S&P500 index was up by 1.3%. The Nasdaq index was higher by 73 points or 1.0%. Over the week, the Dow Jones rose by 3%, the S&P 500 rose by 2.9% and the Nasdaq rose by 2.7%.

US treasuries were weaker on Friday (yields higher)  on Friday. Equities were favoured over safe-haven assets like gold and government bonds. And production rose more than expected in December, while consumer sentiment fell. US 2-year yields rose 5 points to 2.62% and US 10-year yields rose 4 points to 2.79%. Over the week, US 2-year yields rose by 7 points and US 10-year yields rose by 9 points.

Major currencies were weaker against the US dollar in US and European trade compared with the Asia close. The Euro fell from near US$1.1410 to US$1.1350 and was near US$1.1370 in late US trade. The Aussie dollar fell from near US72 cents to around US71.60 cents and was near US71.65 cents in late US trade. And the Japanese yen eased from 109.30 yen per US dollar to JPY109.87 and was near JPY109.76 in late US trade. 

Global oil prices posted solid gains on Friday. OPEC released details of its plans to wind back production. And there were further signs of a thawing in the US-China trade dispute. Also there was a 21 rig decline in the number of oil rigs in operation in the US in the latest week, hitting 8-month lows. Brent crude rose by US$1.52 or 2.5% to US$62.70 a barrel and the US Nymex price rose by US$1.73 or 0.5% to US$53.80 a barrel. Over the week Brent rose by 3.7% and Nymex rose by 4.3%.

Bonjour, Europe

European share markets rose strongly on Friday. There was a report that US Treasury Secretary Steven Mnuchin discussed lifting some or all tariffs imposed on Chinese imports.  Also there was a Bloomberg report that said China has offered to ramp up imports from the US. Trade-sensitive stocks and sectors did best. The pan-European STOXX600 index rose by 1.8%. The UK FTSE lifted by 2% while the German Dax index lifted 2.6%.

Top of the morning, London

Base metal prices were all higher on the London Metal Exchange with lead up the most (2.2%) while tin only rose only 0.2%. Over the week zinc rose 3.7% and nickel rose 3.1% while lead was flat. The gold futures price fell by US$9.70 an ounce or 0.8% to $1,282.60 an ounce. The spot gold price was trading near US$1,281 an ounce in late US trade.  Over the week gold fell by US$6.90 or 0.5%. Iron ore rose by US$1.20 or 1.6% to US$75.95 a tonne. Over the week iron ore rose by US$1.25 or 1.7%.

In London trade, shares of Rio Tinto rose by 0.7% and BHP rose by 1.8%. 

G’day, Australia!

The CBA Business Sales Indicator is released with lending finance. Chinese economic growth figures are released. The IMF releases economic growth forecasts. US markets are closed for Martin Luther King Jr day.

Have a great day, Australia.