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Craig James
Monday, May 13, 2019

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In US data, consumer prices rose by 0.3% in April with the annual rate up from 1.9% to 2% (forecast 2.1%). Excluding food and energy, prices rose by 0.1% with the annual rate up from 2.0% to 2.1% as expected. The budget was in surplus by US$160 billion in April (forecast US$165bn).

US share markets rebounded from lows on Friday. Despite new tariffs being imposed by the US on Chinese goods, investors are still optimistic about a trade deal eventually being secured. US President Trump said he was in "absolutely no rush" to secure a deal. Trade talks will continue in Beijing. Shares in ride-hailing firm Uber Technologies fell by 7.6% in its first day of trade. After being down 358 points, the Dow Jones ended higher by 114 points or 0.4%. The S&P500 index rose by 0.4%. And the Nasdaq index lifted by 6 points or 0.1%. Over the week the Dow lost 2.1%, the S&P 500 fell by 2.2% and the Nasdaq lost 3%.

US treasuries were mixed on Friday. Inflation data was a bit softer than forecast but most traders focussed on China-US trade talks. US 2-year yields were flat near 2.27% and US 10-year yields rose 2 points to 2.47%. Over the week US 2-year yields fell by 8 points and US 10-year yields fell by 7 points.

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European share markets were generally firmer on Friday. Shares in German industrial conglomerate ThyssenKrupp rose by 28.2% on news it will list its elevators business. The pan-European STOXX600 index rose by 0.3%. But while the UK FTSE fell 0.1%, the German Dax lifted by 0.7%. In London trade, shares of Rio Tinto rose by 0.9% and BHP rose by 0.5%.

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Major currencies were mixed against the US dollar in US and European trade compared with the end of Asian trade. The Euro rose from near US$1.1215 to US$1.1250 and was around US$1.1233 in late US trade. The Aussie dollar rose from near US69.85 cents to US70.08 cents and was around US70 cents in late US trade. And the Japanese yen eased from 109.50 yen per US dollar to JPY110.03 and was around JPY109.94 in late US trade. This morning the Aussie is near US69.85 cents and Japanese yen near JPY109.70.

Global oil prices closed mixed on Friday. Investors awaited news on the China-US trade talks. The Brent crude price rose by US23 cents or 0.3% to US$70.62 a barrel. And the US Nymex fell by US4 cents or 0.1% to US$61.66 a barrel. Over the week Brent fell by 0.3% and Nymex fell by 0.5%.

Base metal prices were higher by up to 2.0% on Friday with tin up the most although copper only rose by 0.3%. And lead was the exception, down by 0.8%. Over the week metals were lower by 1.9- 4.2% with lead and zinc down the most. But aluminium was the exception, up by 0.4%.

The gold futures price rose by US$2.20 an ounce or 0.2% to $1,287.40 an ounce. But the spot gold price ended lower, near US$1,286 an ounce in late US trade. Over the week gold rose by US$6.10 or 0.5%. Iron ore was up 30 cents to US$95.45 a tonne. Over the week iron ore rose by US80 cents a tonne or 0.8%.

G’day Australia

In Australia lending data is released with overseas arrivals/departures and credit/debit card statistics. In China, foreign direct investment and vehicle sales data are released. In the US data on consumer inflation expectations is issued.

Published: Monday, May 13, 2019


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