Howd’y USA

There was no major US economic data on Friday but six Federal Reserve officials delivered speeches. Fed vice chair Richard Clarida said on Friday that the central bank will keep an open mind as it begins a broad review of its monetary policy framework.

US President Trump said that agreement had been reached with China on currency manipulation. President Trump says there is a good chance of a broader trade deal.

US sharemarkets rose to three-month highs on continued optimism about China-US trade talks. The Dow Jones index was up by 181 points or 0.7%. The S&P500 index was higher by 0.6%. And the Nasdaq index was up by 68 points or 0.9%. Over the week the Dow and S&P 500 rose by 0.6% and the Nasdaq rose by 0.7%. The Dow has risen for nine straight weeks, the longest winning streak since 1995.

US treasuries were firmer on Friday (yields lower). US 2-year yields fell by 3 points to 2.50% and US 10-year yields fell by 3 points to 2.65%. Over the week US 2-year yields fell by 3 points and US 10-year yields fell by 2 points.

Major currencies were mixed against the US dollar in US and European trade compared with the Asia close. The Euro broadly held between US$1.1315 to US$1.1355 and was near US$1.1340 in late US trade. The Aussie dollar rose from lows near US70.90 cents to highs near US71.50 cents and was near US71.25 cents in late US trade. And the Japanese yen rose from 110.90 yen per US dollar to JPY110.55 and was near JPY110.68 in late US trade.

Global oil prices rose modestly on Friday. The number of oil rigs in operation in the US fell by four in the latest week, the first fall in four weeks. Data from market intelligence provider Genscape showed that crude inventories in West Texas dropped this week to the lowest in four months. Brent crude rose by just 5 cents to US$67.12 a barrel and the US Nymex price rose by US30 cents or 0.5% to US$57.26 a barrel.

Base metal prices rose by up to 1.9% on Friday with copper up the most although lead and aluminium both rose by just 0.3%. Over the week all but one of the metals rose by between 2.0-5.3% with copper up the most. Lead was the exception, down 0.1%.

The gold futures price rose by US$5.00 an ounce or 0.4% to $1,332.80 an ounce. The spot gold price was near US$1,328 an ounce in late US trade. Over the week gold rose by US$10.70 or 0.8%. Iron ore was unchanged at US$86.70 a tonne. Over the week iron fell by US65 cents or 0.7%.

Bonjour, Europe!

European sharemarkets rose modestly on Friday. The focus was on mixed earnings results. In the UK, Canada's Saputo bought Britain's largest dairy food company Dairy Crest  for about 975 million pounds ($1.3 billion). The pan-European STOXX600 index rose by 0.2%. The German Dax gained 0.3% and the UK FTSE rose by 0.2%. In London trade, shares of Rio Tinto rose by 1.7% while BHP rose by 2.2%.

G’day Australia

In Australia there is no major economic data scheduled. In the US the Chicago Federal Reserve national activity index is released with the Dallas Fed manufacturing index.