CMC Markets Weekly Report

Stocks in the U.S eked out modest gains Friday, buoyed by a better-than-expected government jobs report, but still ended off their best levels following news of a "credit event" in Greece.

Stocks in the U.S eked out modest gains Friday, buoyed by a better-than-expected government jobs report, but still ended off their best levels following news of a "credit event" in Greece.

The Dow Jones Industrial Average squeezed out a gain of 14.08 points, or 0.11 percent, to close at 12,922.02. The S&P500 gained 4.96 points, or 0.36 percent, to end at 1,370.87 whilst the tech-heavy Nasdaq rose 17,92 points, or 0.60 percent, to finish at 2,988.34.

In afternoon trading, Greece triggered the payment on default insurance contracts by using legislation that forces losses on all private creditors, according to the International Swaps and Derivatives Association. This follows news that ratings agency Fitch cut Greece's rating to "restricted default" over its bond swap deal.

On the economic front, employers added 227,000 jobs last month according to the Labor Department, while the unemployment rate held steady at a three-year low of 8.3 percent. Economists polled by Reuters had expected a gain of 210,000.

Also on the economic front, U.S. trade deficit surged to $52.6 billion in January, the widest imbalance since October 2008 as imports hit an all-time high, according to the Commerce Department. Exports were up a smaller 1.4 percent to $180.8 billion.

Meanwhile, wholesale inventories grew 0.4 percent in January, according to the Commerce Department. And sales dropped 0.1 percent, while analysts had forecast a 0.8 percent gain.

Major currencies drifted lower against the greenback in European and US trade on Friday. The Euro eased from highs near US$1.3270 to around US$1.3095, and was near US$1.3120 in late US trade. The Aussie dollar eased from highs around US106.60c to US105.65c, and was close to US105.75c in late US trade. And the Japanese yen eased from 81.50 yen per US dollar to JPY82.64 and was near JPY82.41 in late US trade.

Benchmark crude oil prices rose again on Friday, buoyed by solid US jobs data, and on hopes that latest Chinese economic data will lead to easier monetary policy. But a firmer greenback restrained prices. US Nymex rose by US82c or 0.8 percent to US$107.40 a barrel while London Brent crude rose by US54c to US$125.98 a barrel. Over the week Nymex rose by 0.7 percent and Brent rose by 1.9 percent.

Base metal prices rose on Friday with optimism sparked by the Greek bond deal and US jobs data. Metals rose 1.1-2.7 percent but lead slipped 0.1 percent. Over the week, metals fell between 0.9-3.9 percent with aluminium faring worst. The gold price also rose with the April Comex gold price up by US$12.80 or 0.8 percent to US$1,711.50 an ounce. Gold was flat over the week.

Turning to this week's economic calendar, apparent improvement in the US economy will be tested this week with releases of business inventory and retail sales data on Tuesday, the Empire State and Philly Fed manufacturing indices on Thursday, and industrial production and consumer sentiment on Friday. The US PPI is out on Thursday and the CPI on Friday.

Australia's week begins with a Labour Day Holiday in Victoria and Tasmania today. Tomorrow will see housing finance and investment lending data along with the monthly NAB business confidence survey, followed on Wednesday by the Westpac consumer confidence survey and fourth quarter housing starts. Thursday sees inflation expectations and vehicle sales along with the RBA's quarterly bulletin.

On the local stock front there are still quite a few ex-dividends to work through this week and Thursday sees a late rush of earnings results from resource juniors such as Ampella (AMX), Altona (AOH), Bandanna (BND), Endeavour (EVR), Karoon (KAR) and Molopo (MPO) along with retailer Myers (MYR).

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