Scoreboard: China ripples

The Australian sharemarket could slump by 20-30 points at the open of trade after Chinese production growth fell to the lowest levels in almost six years.

Over the week the vote on Scottish independence and a meeting of the US central bank will dominate attention.

In US economic data, retail sales rose by 0.6 per cent in August and lifted 0.3 per cent if autos are excluded. Both results were in line with forecasts. Consumer sentiment rose from 82.5 to 84.6 in September, above forecasts for a result near 83.3.

In Chinese economic data, retail sales rose 11.9 per cent in the year to August with production up 6.9 per cent (near 6-year low) and investment up 16.5 per cent. Results fell short of economist forecasts.

European shares were mixed on Friday ahead of the vote on Scottish independence. The FTSEurofirst 300 index fell by 0.1 per cent with the German Dax down by 0.4 per cent while the UK FTSE rose 0.1 per cent. Australia's major miners were flat in London trade with shares in BHP Billiton and Rio Tinto both broadly unchanged.

US sharemarkets fell on Friday as investors took profits on speculation that the Federal Reserve could take a more hawkish view on the rate outlook at Tuesday's meeting. The Dow Jones index fell by 61.5 points or 0.4 per cent. The broader S&P 500 index fell by 0.6 per cent while the Nasdaq lost 24 points or 0.5 per cent. Over the week key indexes fell for the first time in six weeks with the Dow lower by 0.9 per cent, the S&P 500 lost 1.1 per cent while the Nasdaq eased 0.3 per cent.

US long-term treasury prices fell on Friday (yields higher) as firm economic data fuelled speculation that the US Federal Reserve may lift rates earlier than expected. US 2 year yields were flat at 0.56 per cent while US 10 year yields were up by 6 points to 2.609 per cent. Over the week US 2 year yields rose by 3 points while US 10 year yields rose by 14 points.

Major currencies were generally lower against the greenback over the European and US sessions on Friday. The US dollar index hit a 15-month high, up for the ninth straight week. The Euro held between US$1.2910 and US$1.2980, before ending US trade near US$1.2960. The Aussie dollar eased from highs near US90.80c to lows around US90.30c before ending the US session near US90.35c. The Aussie is trading US90.07c this morning. And the Japanese yen held between ¥107.09 per US dollar and ¥107.38, ending US trade near ¥107.32.

World oil prices fell again on Friday in response to a firmer greenback, an absence of supply disruptions and soft demand. Brent crude fell by US97c or 1.0 per cent to US$97.11 a barrel with the US Nymex price down by US56c a barrel or 0.6 per cent to US$92.27 a barrel. Over the week Brent fell by US$3.71 or 3.7 per cent with the Nymex price down by US$1.02 or 1.1 per cent.

Base metal prices were generally higher by up to 1.0 per cent on Friday with tin up the most. But aluminium bucked the trend, down by 0.5 per cent with nickel down by 0.1 per cent. Over the week metal prices fell up to 6.1 per cent led by nickel. Gold prices fell to an eight-month low on Friday with the Comex gold futures quote lower by US$7.50 an ounce or 0.6 per cent to US$1,231.50 per ounce. Over the week gold fell by US$35.80 an ounce or 2.8 per cent. Iron ore rose by US10c or 0.1 per cent on Friday to US$82.00 a tonne. Over the week iron ore fell by US$1.60 a tonne.

Ahead: In Australia, new car sales figures are released. In the US, industrial production data is released together with the Empire State index.

Craig James is the chief economist at CommSec.