Scoreboard: Confidence surge

Strong gains are expected on the local market after solid US economic data and corporate earnings delighted investors in Europe and the US.

In the US, preliminary data showed that consumer confidence hit the highest levels in more than seven years in October, rising from 84.6 to 86.4, above forecasts centred on a result near 84.1. Housing starts rose by 6.3 per cent in September to a 1.017 million annual rate, above the average forecast of 1.004 million.

European shares rose sharply on Friday with the FTSEurofirst 300 index up by 2.8 per cent -- the biggest increase in three years. US economic data and corporate earnings results provided encouragement to investors. The UK FTSE also gained 1.9 per cent and the German Dax soared by 3.1 per cent. Australia's major miners were higher in London trade with shares in BHP Billiton up by 1.4 per cent while Rio Tinto gained 0.5 per cent.

US sharemarkets rose sharply on Friday. Economic data beat expectations while investors applauded earnings results from key companies. In response to earnings results, shares in General Electric rose by 2.4 per cent while Honeywell rose by 4.2 per cent. The Dow Jones rose by 263 points or 1.6 per cent with the S&P 500 index up by 1.3 per cent while the Nasdaq rose by 41 points or 1.0 per cent. Over the week the Dow Jones and the S&P 500 indexes were down by 1.0 per cent while the Nasdaq lost 0.4 per cent.

US treasury prices fell on Friday (yields higher). Economic data beat expectations and equities rose, reducing enthusiasm for safe-haven government bonds. US two-year yields were up by 2 points to 0.375 per cent while US 10-year yields were up by 3 points to 2.20 per cent. Over the week US two-year yields fell by 4.5 points and US 10-year yields fell by 8 points.

Major currencies eased against the greenback over European and US sessions on Friday in response to solid US economic data. The Euro fell from highs near $US1.2835 to lows near $US1.2745, ending US trade near $US1.2760. The Aussie dollar rose from lows near US87.30c to highs near US88.10c before reversing course and ending the US session near US87.40c. And the Japanese yen eased from ¥106.13 per US dollar to ¥106.93, ending US trade near ¥106.85. 

World oil prices rose slightly on Friday, recovering from multi-year lows on bargain hunting at the end of the week. During the session Brent crude hit 4-year lows. Brent crude rose by US34c to $US86.16 a barrel while the US Nymex crude price rose by 5c to $US82.75 a barrel. Over the week Brent fell by $4.05 or 4.5 per cent while Nymex crude fell by $US3.07 or 3.6 per cent.

Base metal prices rose by up to 3.6 per cent on the London Metal Exchange on Friday with aluminium leading the way. But tin rose by just 0.3 per cent. Over the week prices fell up to 4.5 per cent but aluminium bucked the trend, up 2.8 per cent. Gold fell on Friday with the Comex gold futures quote down by $US2.20 an ounce or 0.2 per cent to $US1,229.00 per ounce. Over the week, gold rose by $US7.30 or 0.6 per cent. Iron ore was up by US10c on Friday or 0.1 per cent to $US80.60 a tonne and gained US70c over the week.

Ahead: In Australia, the Reserve Bank's Head of Domestic Markets Department, Chris Aylmer, participates in a panel discussion. In the US, no major economic data is issued.

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