Scoreboard: Earnings caution

The local market is expected to open slightly lower as investors remain cautious ahead of earnings season, while higher iron ore, oil and gold prices should give a boost to the resources sector.

In US economic data, durable goods orders rose by 0.7 per cent in June, ahead of forecasts tipping a 0.5 per cent gain. Excluding defence equipment, orders rose by 0.7 per cent, ahead of projected gains of 0.6 per cent.

European shares eased on Friday after data showed the German Ifo business climate index hit nine-month lows in July. Shares in luxury retailer LVMH fell by 6.8 per cent after its profit result missed market forecasts. The FTSEurofirst 300 index fell by 0.7 per cent with the German Dax down by 1.5 per cent while the UK FTSE lost 0.4 per cent. Australia's major miners were slightly lower in London trade with shares in BHP Billiton down by 0.1 per cent while Rio Tinto lost 0.7 per cent.

US sharemarkets fell on Friday. Shares in online retailer Amazon fell by 9.6 per cent after reporting a bigger-than-expected loss in the second quarter. Shares in Visa lost 3.6 per cent after cutting its revenue forecast for 2014. The Dow Jones index lost 123 points or 0.7 per cent with the S&P 500 index down by 0.5 per cent while the Nasdaq lost 22.5 points or 0.5 per cent. Over the week the Dow lost 0.8 per cent while the S&P 500 was flat while the Nasdaq was up by 0.4 per cent.

US treasury prices rose on Friday (yield lower) as investors reduced holdings in equities in favour of safe-have assets. US 2-year yields fell by 1 point to 0.492 per cent while US 10-year yields were down by 4 points to 2.467 per cent. Over the week US 2-year yields were unchanged while US 10-year yields fell by less than 1 point.

Major currencies were weaker against the US dollar following European and US sessions on Friday. The euro fell from highs near $US1.3475 to around $US1.3425, before ending US trade near $US1.3430. The Aussie dollar eased from highs near US94.20c to lows near US93.88c before ending the US session near US93.95c. And the Japanese yen held between 101.69 yen per US dollar and JPY101.93, ending US trade near JPY101.82.

World oil prices rose on Friday. Ongoing violence in Ukraine and tensions between Russia and western nations had investors fretting about possible disruptions to global oil supplies. Brent crude rose by $US1.32 or 1.2 per cent to $US108.39 a barrel and the US Nymex price edged up by US2 cents a barrel to $US102.09 a barrel. Over the week Brent rose by $US1.15 a barrel while US Nymex lost $US1.04 a barrel.

Base metal prices rose by up to 1.4 per cent on Friday with lead posting the strongest gain. But aluminium fell by 1.4 per cent and copper lost 0.6 per cent. Over the week, base metal prices rose up to 4.5 per cent with zinc and lead posting the best gains. Gold prices rose on Friday as investors continued to monitor the tensions between Russia and western nations. The Comex gold futures quote rose by $US12.50 or 1.0 per cent to $US1,303.30 per ounce. Over the week gold fell by $US6.10 an ounce. Iron ore rose by US70c on Friday or 0.7 per cent to $US94.30 a tonne. But over the week iron ore fell by $US2.30.

Ahead: The market should open modestly weaker following declines in Europe and the US but the resources sector will be supported by higher gold, oil and iron ore prices. There will be some caution ahead of the start of earnings season.

In Australia, no major economic data is scheduled. In the US, the pending home sales index, the "flash" services index and Dallas Federal Reserve index are all released.

Craig James is the chief economist at Commsec.

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