Record run on Wall Street triggers rebound in shares
The Australian sharemarket ended the week largely flat after a big rebound on Friday, with the bourse jumping 1.7 per cent.
For the week, the benchmark S&P/ASX 200 index shed 3.2 points, at 5120.2 points, while the broader All Ordinaries index lost 8.2 points to 5129.3 points.
Much attention was directed at the US, where the Dow Jones Industrial Average posted its tenth consecutive winning session and its eighth consecutive all-time high.
And traders were becoming increasingly fixated on the S&P 500 index - a broader measure than the Dow - after it came within just two points of its all-time high on Friday morning.
The Australian dollar jumped more than a cent against the greenback, to US103.72¢, after remarkable but questionable jobs figures showed 71,500 jobs were added last month - the largest monthly gain in more than a decade.
The unemployment rate remained steady at 5.4 per cent, as 53,700 part-time and 17,800 full-time positions were created. The figures had some economists winding back their expectations of another Reserve Bank rate cut this year.
"The chance of a rate cut in April, for domestic reasons, is approaching zero," NAB economist Robert Henderson said.
But UBS interest rate strategist Matthew Johnson said the belief that the Reserve Bank had reached the end of its easing cycle was slightly exaggerated, even if the direction was right.
"Any sensible forecaster would be moving their forecast after the run of data we've had over the last week or so," Mr Johnson said.
"Prior to that, other factors were encouraging as well, with the big increase in equity values and the decline in the Australian dollar that we've seen in the months up to now also giving us reason to think the RBA wouldn't have to cut the rate quite as far," he said.
The ASX 200 has been one of the best-performing sharemarkets this year. It has risen 10 per cent, matching other exchanges such as the Dow Jones (up 10.9 per cent), the S&P500 (up 9.6 per cent) and the FTSE100 (up 10.7 per cent).
Only Japan's Nikkei has been stronger, gaining 20.6 per cent since early January.
On Friday the Australian dollar came within a whisker of reaching ¥100 as the new heads of the Bank of Japan were confirmed by the country's upper house.
The Australian dollar had been broadly firmer thanks to improving sentiment about the global economic outlook at home and abroad, and rising sharemarkets.
But currency strategists questioned whether the Bank of Japan's expected push for further monetary easing would help to achieve its aim of 2 per cent inflation.
"We don't believe the BoJ will be able to achieve their 2 per cent inflation target unless the government introduces widespread structural reforms to the Japanese economy," Commonwealth Bank's chief currency strategist, Richard Grace, said.
"During the last 15 years, and in response to deflationary pressures, the Bank of Japan has used a monetary policy mix of quantitative easing, a zero interest rate policy and an overnight cash rate no higher than 0.7 per cent (which has averaged 0.15 per cent over this entire period)," he said. "[Yet] despite 15 years of ultra easy monetary policy, Japan's economy has not been able to generate inflation."