In US economic news, the ISM manufacturing gauge rose from 56.2 to 2½-year high of 56.4 in October, ahead of forecasts for a result near 55.0. But vehicle sales rose from 15.21 million to 15.23m in October, short of forecasts near 15.4m due to weaker truck sales.
After one of the Dow's most volatile weeks in decades, institutional investors remain far from ready to give the "all-clear" sign regarding U.S. stocks. Their latest preoccupation? Concern that a large bank in France may be in trouble.
European shares were mixed on Friday as investors digested earnings reports. The FTSEurofirst 300 index fell 0.3pct from 5-year highs and while the German Dax also eased 0.3pct, the UK FTSE rose by 0.1pct. Mining shares were also mixed in London trade with BHP Billiton down by 0.6pct while Rio Tinto shares rose by 0.8pct.
US sharemarkets rose on Friday. While some investors fretted that the Federal Reserve could reduce stimulus in response to stronger data, others focussed on the positive influence of a stronger economy on profits. Shares in Container Store doubled in price on their market debut. The Dow Jones rose by almost 70 points or 0.5pct with the S&P 500 up by 0.3pct while the Nasdaq rose by 2.3pts or 0.1pct. Over the week the Dow Jones index rose by 0.3pct and the S&P 500 rose by 0.1pct while the Nasdaq lost 0.5pct.
US longer-term treasury yields fell modestly on Friday (yields higher). Stronger US manufacturing data raised speculation that the Federal Reserve could wind back stimulus earlier than expected. US 2yr yields were steady near 0.313pct and US 10yr yields were up 6pts to 2.62pct. Over the week US 2yr yields were largely steady but US 10yr yields rose by 11pts.
The US dollar lifted against major currencies in European and US trade on Friday. The Euro eased from highs near US$1.3565 to around US$1.3480 before ending US trade around US$1.3485. The Aussie dollar eased from near US94.90c to around US94.20c, ending US trade near US94.35c. And the Japanese yen eased from near 97.83 yen per US dollar to JPY98.83, ending US trade near JPY98.67.
World oil prices fell on Friday as the US dollar rose in response to a solid manufacturing report. As oil is priced in US dollars, a stronger greenback reduces the purchasing power of buyers in Europe and Asia. Brent crude fell by US$2.93 or 2.7pct to US$105.91 a barrel. Nymex fell by US$1.77 or 1.8pct to US$94.61 a barrel. Over the week Brent lost 1.0pct while Nymex crude fell by 3.3pct.
Base metal prices eased up to 0.9pct on Friday with aluminium leading the declines. But lead bucked the trend, up by 0.2pct. Over the week metals fell up to 2pct but copper bucked the trend, up 0.8pct. Gold also fell as the US dollar rose on Friday with the Comex December futures gold price down by US$10.50 or 0.8pct to US$1,313.20 per ounce. Over the week gold lost US$39.20 or 2.9pct. The iron ore price lifted by US$3.40 a tonne or 2.5pct on Friday to US$135.30 a tonne. Iron ore rose US$2.00 over the week.
Ahead: In Australia, the inflation gauge, retail trade and job ads data are released. In the US, data on factory orders and revisions to durable goods orders are expected.
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