MORNING REPORT (6am AEDT)
In US economic news, personal income was flat in December (forecast +0.2%) while spending rose 0.4% (forecast +0.2%). The Chicago purchasing managers index eased from 60.8 to 59.6 in January (forecast 59.0). US consumer sentiment rose from a preliminary reading of 80.4 in January to a final reading of 81.2 but was down from 82.5 in December. The employment cost index rose 0.5% in the December quarter.
China´s official manufacturing purchasing managers index fell from 51.0 to 50.5 in January in line with forecasts.
European shares eased at the end of the week and end of the month. The FTSEurofirst 300 index fell by 0.2% to end the month down 1.9%. The UK FTSE lost 0.4% on Friday and the German Dax fell by 0.7%. Mining shares were mixed in London trade with BHP Billiton shares down by 0.9% while Rio Tinto edged higher by 0.1%.
US sharemarkets fell on Friday. Shares in Amazon fell 11% after earnings fell short of analyst forecasts. Shares in Chevron fell 4.1% on earnings news while Google rose 4%. The US Dow Jones fell 120 points in the last 75 minutes of trade to end lower by almost 150pts or 0.9%. The S&P 500 lost 0.7% while the Nasdaq fell by 19pts or 0.5%. Over the month the Dow fell by 5.3%, the S&P lost 3.6% and the Nasdaq fell by 1.7%.
US long-term treasury prices rose on Friday (yields lower) as investors sold out of equities and squared positions at the end of the month. US 2 year yields fell by 2 points to 0.33% while US 10 year yields fell by 5 points to 2.65%. Over the week US 2 year yields fell by 1.5 points and US 10 year yields fell by 10 points.
Major currencies were mixed against the greenback in European and US trade on Friday. The Euro fell from highs near US$1.3565 to US$1.3480, and was near US$1.3485 in afternoon US trade. The Aussie dollar fell from highs near US87.75c to lows near US86.95c, and was near US87.55c in afternoon US trade. And the Japanese yen strengthened from 102.77 yen per US dollar to JPY102.00 and was trading near JPY102.03 in afternoon US trade. The Aussie is near US87.45c this morning and the Japanese yen at JPY101.95.
World oil prices fell on Friday as traders booked profits at the end of the week and month. Brent crude fell by US$1.55 or 1.4% to US$106.40 a barrel while US Nymex crude fell by US74c to US$97.49 a barrel. Over the week Brent fell by US$1.48 but Nymex rose by US85c or 0.9%.
Base metal prices fell up to 1.3% on the London Metal Exchange on Friday with aluminium leading the declines. But nickel bucked the trend, up 1.2%. Over the week metals fell between 1.6-3.5%, but tin rose 0.1%. The gold price eased slightly on Friday with the Comex gold futures down by US$2.70 or 0.2% to US$1,239.80 per ounce. Gold fell 2% over the week but rose 3.5% over the month. The iron ore price was unchanged at US$122.60 a tonne.
Ahead: In Australia, data on job ads, building approvals and home prices are released with the inflation gauge and the performance of manufacturing index. In the US, auto sales, construction spending and the ISM manufacturing index are issued.
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