Howd’y USA

In US economic data, export prices fell 0.6% in January (forecast -0.1%) and import prices fell 0.5% (forecast -0.1%). Consumer sentiment rose from 91.2 to 95.5 in February (forecast 94.5). Industrial production fell 0.6% in January (forecast +0.1%). The Empire State manufacturing index rose from 3.9 to 8.8 in February (forecast +0.7).

Chinese state news agency Xinhua reported China and the US had reached a consensus in principle on some key trade issuesChinese President XI Jinping said the talks will continue next week in Washington.  

US share markets posted solid gains in reaction to the news of progress on US-China trade talks. Trade sensitive stocks rose the most with Boeing up 2%. At the close the Dow Jones index was up by 444 points or 1.7%. The S&P500 index was up by 1.1%. And the Nasdaq index was higher by 45.5 points or 0.6%. Over the week the Dow rose 3.1% with the S&P 500 up 2.5% and the Nasdaq up 2.4%.

US treasuries were weaker on Friday (yields higher). Economic data was mixed while investors favoured growth-focussed assets like equities and commodities on news of the US-China trade talks. US 2-year yields rose by 2 points to 2.52% and US 10-year yields rose by 1 point to 2.66%. Over the week US 2-year yields rose by 5 points and US 10-year yields rose by 3 points.

Major currencies were generally firmer against the US dollar in US and European trade compared with the Asia close. The Euro rose from lows near US$1.1235 to US$1.1305 and was near US$1.1295 in late US trade. The Aussie dollar rose from lows near US70.80 cents to highs near US71.50 cents and was near US71.45 cents in late US trade. And the Japanese yen held between 110.26 yen per US dollar and JPY110.63 and was near JPY110.48 in late US trade.

Global oil prices rose by up to 2.6% on Friday. Investors were encouraged by progress at US-China trade talks. And there was concern about near-term oil supplies on news of an outage at Saudi Arabia's Safaniya offshore oilfield. Brent crude rose by US$1.68 or 2.6% to US$66.25 a barrel and the US Nymex price rose by US$1.18 or 2.2% to US$55.59 a barrel. Over the week Brent rose by 6.8% and Nymex rose by 5.4%.

The gold futures price rose by US$8.20 an ounce or 0.6% to $1,322.10 an ounce. The spot gold price was near US$1,321 an ounce in late US tradeOver the week gold rose by US$3.60 or 0.3%. Iron ore fell by US45 cents or 0.5% to US$87.35 a tonne. Over the week iron ore fell by US$6.85 or 7.3%.

Bonjour, Europe!

European share markets rose on Friday on news of the US-China trade talks. Also banks rose 2.8% after European Central Bank board member Benoit Coeure said a new round of TLTROs - cheap multi-year loans to banks - is "possible". The pan-European STOXX600 index rose by 1.4% to 3-month highs, and gained 3% for the week. The German Dax gained 1.9% while the UK FTSE lifted 0.6%. In London trade, shares of both Rio Tinto and BHP rose 1.2%.

Top of the morning, London

Base metal prices were firmer on the London Metal Exchange on Friday, lifting by up to 2.4% with zinc up the most. Over the week metals were mixed. Zinc, nickel and aluminium fell 1.4-1.9%. Other metals rose up to 0.7%.  

G’day Australia

No major economic data is scheduled. US markets are closed for Presidents Day.

 

Have a great day, Australia!