US MORNING REPORT (5.15am AEDT)
In US economic data, non-farm payrolls (employment) rose by 175,000 in February, ahead of forecasts for a gain of 149,000 jobs. The unemployment rate rose slightly from 6.6% to 6.7%. Average earnings grew by 0.4%. The trade deficit expanded from US$38.7 billion to US$39.1 billion in January, just ahead of forecasts.
In Chinese economic data, the trade balance swung from a US$31.86bn surplus to US$22.98bn deficit in February. Producer prices fell by 2.0% over the year to February and consumer prices rose by 2.0%, as expected.
European shares fell on Friday as investors squared positions on uncertainty about the situation in Crimea. The FTSEurofirst 300 index fell by 1.3%, while the UK FTSE lost 1.1% and the German Dax fell by 2.0%. Mining shares slumped in London trade in response to lower iron ore and metal prices with shares in BHP Billiton down by 2.1% while Rio Tinto lost 3.3%.
US blue-chip shares rose modestly on Friday. While investors were encouraged by the jobs data, they remained uncertain about the situation in Crimea. At the close of trade, the US Dow Jones was up by almost 31 points or 0.2% with the S&P 500 up by 0.1% to a record high but the Nasdaq lost almost 16 points or 0.4%. Over the week the Dow rose 0.8%, the S&P 500 lifted 1.0% and the Nasdaq increased by 0.7%.
US longer-term treasury prices fell on Friday (yields higher) in response to a solid rise in US jobs in February. US 2 year yields rose 2 points to 0.373% while US 10 year yields lifted 5 points to 2.79%. Over the week US 2yr yields rose 6 points and US 10yr yields rose by 19 points.
Major currencies fell against the greenback after the stronger-than-expected US jobs data. The Euro fell from highs near US$1.3915 to US$1.3855 and was around US$1.3875 in afternoon US trade. The Aussie dollar rose from near US91.30c to lows near US90.60c and was trading near US90.70c in afternoon US trade. And the Japanese yen weakened from near 102.82 yen per US dollar to JPY103.73 and was trading near JPY103.25 in afternoon US trade. This morning the Aussie is near US90.40c, Japanese yen at JPY102.98 and Euro at US$1.3875.
World oil prices rose on Friday in response to uncertainty about the situation in the Crimea and solid US jobs data. Brent crude rose by US90c or 0.8% to US$109.00 a barrel while US Nymex crude rose by US$1.02 to US$102.58 a barrel. Oil was largely steady over the week.
Base metal prices fell by between 1.1-3.7% on the London Metal Exchange on Friday with copper leading the falls but nickel down the least. The Comex gold futures price fell in a busy session as the greenback rose in response to the encouraging US jobs report. Gold fell by US$13.60 an ounce or 1.0% to US$1,338.20 per ounce but rose US$16.60 over the week. Iron ore slid by US$2.70 or 2.4% on Friday to US$114.20 a tonne to be down US$3.90 on the week.
Ahead: In Australia and the US no economic data is expected. There are holidays in Victoria, Tasmania, South Australia and ACT.
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