How’dy USA

In US data, non-farm payrolls (employment) rose by 263,000 in April (forecast +189,000). The jobless rate fell from 3.8% to a 49- year low of 3.6%. Average hourly earnings rose by 0.2% with the annual rate stable at 3.2%. The ISM services index fell from 56.1 to 55.5 (forecast 57) with prices, orders and employment all lower. US President Donald Trump has tweeted that tariffs on a raft of Chinese imports will lift to 25% on Friday "The Trade Deal with China continues, but too slowly, as they attempt to renegotiate."

US share markets rose solidly on Friday. Investors were encouraged by data showing a strong rise in employment and modest wage growth. Earnings results supported share market gains. The Dow Jones rose by 197 points or 0.8%. The S&P500 index rose by 1.0%. And the Nasdaq index lifted 127 points or 1.6%. Over the week the Dow lost 0.15% but the S&P 500 and Nasdaq both gained 0.2%.

US treasuries were firmer on Friday (yields lower). While jobs rose more than expected in April, wage growth remained tame. And a gauge of activity in the services sector fell in April. US 2-year yields fell by 1 point to 2.34% and US 10-year yields fell 2 points to 2.53%. Over the week US 2-year yields rose by 5 points and US 10- year yields rose by 3 points.

Bonjour Europe

European share markets were firmer on Friday in response to the strong US jobs data. The pan-European STOXX600 index rose by 0.4%. The UK FTSE also rose by 0.4%. The German Dax lifted 0.6%. In London trade, shares of Rio Tinto rose by 1.1% and BHP rose by 0.9%.

Hello World!

Major currencies were firmer against the US dollar in US and European trade compared with the end of Asian trade. The Euro rose from US$1.1140 to near US$1.1205 and was around US$1.1200 in late US trade. The Aussie dollar rose from US69.87 cents to US70.24 cents and was around these levels in late US trade. And the Japanese yen rose from 111.60 yen per US dollar to JPY111.05 and was around these levels in late US trade. After the tweet from Donald Trump the euro has fallen this morning to US$1.1170, Aussie is US69.65c and yen is JPY110.60.

Global oil prices rose slightly on Friday. The solid US jobs data provided encouragement on oil demand. But the number of oil rigs in operation in the US rose from 805 to 807 in the past week. The Brent crude price rose by US10 cents or 0.1% to US$70.85 a barrel. And the US Nymex rose by US13 cents or 0.2% to US$61.94 a barrel. Over the week Brent fell by 1.8% and Nymex fell by 2.1%.

Base metal prices were higher by up to 2.0% on Friday with lead up the most although tin only rose by 0.3%. And aluminium was the exception, down by 1.5%. Over the week metals were lower with tin down the most (down 3.1%) and zinc down the least (down 0.6%).

The gold futures price rose by US$9.30 an ounce or 0.7% to $1,281.30 an ounce. But the spot gold price ended lower, near US$1,279 an ounce in late US trade. Over the week gold fell by US$7.10 or 0.6%. Iron ore was up 5 cents to US$94.65 a tonne. Over the week iron ore rose by US$1.85 a tonne or 2%.

G’day Australia

In Australia data on job ads will be released with the Melbourne Institute inflation gauge. In China the Caixin services sector gauge is released.