CMC Markets Weekly Report

Stocks in the U.S finished higher across the board on Friday with the Dow Jones setting a new record high. All three major averages were up more than 2 percent for the week, boosted by a stronger-than-expected monthly government payroll numbers.

The Dow Jones Industrial rose 67.58 points, or 0.47 percent, to close at 14,397.07, finishing higher for the 10th consecutive day on Friday. The S&P500 gained 6.92 points, or 0.45 percent, to end at 1,551.18. And the Nasdaq climbed 12.28 points, or 0.38 percent, to finish at 3,244.37.

The U.S. added 236,000 jobs in February, while unemployment rate tumbled to 7.7 percent, the lowest since December 2008, according to the Labor Department, blowing past expectations for a gain of 160,000 and a rate of 7.9 percent.

Investors watch the nonfarm payrolls number as a measure of economic recovery and to discern the Federal Reserve's policy moves. The central bank has said it will maintain its low interest rate policy at least until unemployment falls to 6.5 percent and inflation rises to 2.5 percent. However, the Fed's bond buying will likely stop well ahead of that if the Fed sees signs of sustained growth.

Also on the economic front, wholesale inventories rose 1.2 percent in January, according to the Commerce Department. Economists polled by Reuters expected a gain of 0.3 percent. Meanwhile, sales at wholesalers declined 0.8 percent, against expectations for an increase of 0.1 percent.

In Asia, Japan's Nikkei jumped to a new four-and-half-year high in Friday's session, thanks to the yen's decline and revised growth figures showing the Japanese economy stabilised in the fourth quarter of 2012 after two quarters of a shallow recession.

China posted strong trade data which showed exports rising 22 percent in February from a year ago, though imports were weaker than forecast.

Shortly after the European market close, Fitch downgraded Italy's credit rating to BBB from A- with a negative outlook, citing the uncertainty from February's inconclusive election results.

The U.S dollar rose against major currencies in European and U.S trade on Friday following strong U.S jobs data. The Euro fell from near US$1.3135 to US$1.2960 and was near US$1.3005 at the close of U.S trade. The Aussie dollar closed at US102.30c at the end of the U.S session. And the Japanese yen weakened from 95.24 yen per U.S dollar to JPY96.50, and ended U.S trade at JPY96.02.

In commodity markets, world crude oil prices finished mixed on Friday. Brent fell by US30c to US$110.40 but the U.S Nymex crude price lifted by US39c to US$91.95 a barrel. Base metal prices were mixed on the London Metals Exchange on Friday. Lead, nickel and tin rose up to 0.6 percent while other metals fell up to 0.8 percent. The gold price rose in thin trade with the Comex April gold futures price up by US$1.80 an ounce to US$1,576.90 per ounce.

In the week ahead, there's no major economic updates in Australia however, Victoria and Tasmania have a day off today for the Labour Day public holiday. Australian Capital Territory is also on holiday for the Canberra Day public holiday. In the U.S, the investment trends report is released.

Tuesday we can expect the NAB business confidence for February, RBA credit card balances for January and in the U.S the treasury budget is released.

Wednesday, Westpac consumer confidence for March, ABS home loans and investment lending for January is released and in the U.S investors can expect mortgage applications, retail sales, import/export prices and business inventories.

Thursday, Melbourne institute consumer inflation expectation for March, ABS official jobs data for February is released and in the U.S, CPI, Empire State manufacturing survey, industrial production and consumer sentiment rounds off the week.