Following a rough day on Friday when the Australian share market fell to its lowest level since late March and closed the week down 2.2%, things look brighter as a new week begins. ASX futures were up 25 points or 0.4% to 7,013 on the weekend.
US stocks also drifted lower on a quiet trading day, with the case growing for the Fed to raise rates by a quarter of a per cent at its next meet.
As the week’s trade closed, the Dow Jones was down 187 points or 0.6%, the S&P 500 slipped 0.3% and the Nasdaq shed 18 points or 0.1%.
Over the course of the week, the Dow lost 2%, the S&P 500 1.2% and the Nasdaq 0.9%.
Jobs data puts pressure on
Jobs data in the US from June was robust, with employment rising by 209,000 and the unemployment rate easing from 3.7% in May to 3.6% in June and participation steady at 62.6%.
Also putting pressure on inflation were average hourly earnings, which rose by 0.4% in June to be up 4.4% on a year ago.
With this data in place, all eyes are now on the latest CPI report, due Wednesday, which will strongly influence the rates decision.
Something else to watch on Wednesday will be the meeting of the Reserve Bank of New Zealand, following that country’s technical recession status.
Currencies and crude
Currencies were stronger against the US dollar in European and US trade, with the Euro up from US$1.0866 to US$1.0972 and closing at US$1.0965.
The Aussie dollar was buoyant, moving from US66.21 cents to US67.00 cents to rest near US66.75 cents at the US close.
The Japanese yen firmed from 143.63 yen per US dollar to JPY142.05 and was near JPY142.10 at the US close.
Oil prices scaled to about 3%, a nine-week high, as the week ended, on the back of supply concerns which have outweighed fears that further interest rate hikes could slow global economic growth and reduce demand for oil.
Brent crude was up US$1.95 or 2.5% to US$78.47 a barrel, while US Nymex crude added US$2.06 or 2.9% to US$73.86 a barrel – both benchmarks ended the week up about 5%.
Commodities
Base metal prices rose on Friday, with copper futures gaining 1.3% as the US dollar weakened and stocks in London Metal Exchange warehouses declining to their lowest since April.
Aluminium futures were up 0.4%.
Over the week, copper rose by 0.7% but aluminium fell by 0.2%.
Gold futures were up by US$17.10 or 0.9% to US$1,932.50 an ounce. Spot gold was trading near US$1,924 an ounce at the US close.
Iron ore futures lost US$1.73 or 1.5% to US$110.54 a tonne following concerns about steel output curbs and extreme heat warnings in China. Over the week, iron ore fell by 1%.
What’s happening in small caps?
The S&P/ASX Small Ordinaries closed at 2,759.1 on Friday, down 1.67% from the previous day.
Making news this morning, which you can read more about throughout the day with Proactive, are:
- Alkane Resources Ltd (ASX:ALK) has released the latest exploration results for drilling in the region around the company’s Tomingley Gold Operations in Central West New South Wales.
- The board of Kin Mining NL (ASX:KIN) has appointed highly experienced mining executive Rowan Johnston as executive chairman.
- Forrestania Resources Ltd (ASX:FRS) has earned a 50% interest in the compelling Hydra Lithium Project in northern Quebec, Canada.
- Carnarvon Energy Ltd (ASX:CVN) has entered into a binding agreement to divest a 10% interest in its Bedout assets to OPIC Australia Pty Limited, a wholly owned subsidiary of CPC Corporation, Taiwan (CPC), Taiwan’s national oil and gas company.]
- Emyria Ltd (ASX:EMD) has successfully recruited the first patient for its Phase 2B, MDMA-assisted therapy trial for PTSD, with the first treatment expected in August.