29 March 2024
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Good morning, Australia

Craig James
20 January 2020

How’dy USA

In US economic data, housing starts rose by 16.9% in December to a 1.608m annual rate (forecast 1.375m) - a 13-year high. Building permits fell by 3.9% (forecast -1.9%). Industrial production fell by 0.3% in December (forecast -0.2%). The JOLTS series of job openings fell from 7.361 million in November to 6.8 million in December (forecast 7.233m). Consumer sentiment fell from 99.3 to 99.1 in January (forecast 99.3).

US share markets closed at record highs on Friday. Investors were encouraged by data showing resilience of the Chinese economy. Data on production, retail sales and investment beat forecasts. Chinese economic growth matched forecasts with 6% annualised growth in the December quarter. Investors were further encouraged by data showing US housing starts at a 13-year high. The Dow Jones index was up by 50 points or 0.2%. The S&P500 index rose by 0.4% and the Nasdaq index lifted by 32 points or 0.3%. Over the week the Dow rose by 1.8%, S&P 500 rose by 2% and Nasdaq rose by 2.3%.

US longer-term treasuries were weaker on Friday (yields higher) in response to better-than-expected Chinese economic data and higher US housing starts. US 2-year yields were flat near 1.565% and US 10-year yields rose by 2 points to 1.825%. Over the week US 2-year yields fell 1 point and US 10-year yields fell by less than 1 point.

Bonjour Europe

European share markets were firmer on Friday. Chinese economic data was better than expected. There was continued optimism on global trade and economic activity. EU Trade Commissioner Phil Hogan said he had a good exchange of views with US Trade Representative Robert Lighthizer, saying that there was "a good start" to trade talks. The pan-European STOXX600 index rose by 1.0% to record highs, the German Dax rose by 0.7% and the UK FTSE gained 0.9%. In London trade, shares of Rio Tinto rose by 2.8% and BHP gained 2.3%.

Hello World!

Major currencies were weaker against the US dollar in European and US trade. The Euro fell from highs near US$1.1140 to lows near US$1.1085 and was around US$1.1090 at the US close. The Aussie dollar fell from highs near US69.10 cents to near US68.70 cents and was near the lows at the close of US trade. And the Japanese yen held between 110.05 yen per US dollar and JPY110.25 and was near JPY110.14 at the US close.

Global oil prices rose by up to 0.4% on Friday. Chinese economic data was generally stronger than forecast. But the number of oil rigs in operation in the US rose by 14 to 673, raising the risk of higher oil supply. The Brent crude price rose by US23 cents or 0.2% to US$64.85 a barrel. And the US Nymex price rose by US2 cents to US$58.54 a barrel. Over the week Brent fell by US13 cents or 0.2% and Nymex fell by US50 cents or 0.8%.

Base metal prices were mixed on Friday. Lead, copper and aluminium fell by up to 1.3%. Other metals rose by up to 1.0%, led by nickel. Over the week tin rose 3.3% and lead rose 3.2% but nickel lost 2%.

The gold futures price rose by US$9.80 or 0.6% to US$1,558.80 an ounce. Spot gold was trading near US$1,556 an ounce in late US trade. Over the week gold rose by US$1.30 or 0.1%. Iron ore rose by US50 cents or 0.5% to US$95.75 a tonne. Over the week iron ore rose by US$2.50 or 2.7%.

G’day Australia

In Australia, no major economic data is due. The US financial markets are closed for Martin Luther King Jr Day.

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