In US economic data, the Chicago purchasing managers index rose from 52.6 to 64.3 in August -- the biggest monthly point gain since July 1983. US personal income rose by 0.2 per cent in July with spending down by 0.1 per cent -- both results fell short of forecasts. And consumer sentiment rose from 79.2 to 82.5 in August, above forecasts for a result near 80.1.
European shares rose on Friday in choppy trade. The FTSEurofirst 300 index rose by 0.3 per cent to leave shares up 1.8 per cent in August -- the biggest gain since February. The German Dax was up by 0.1 per cent on Friday while the UK FTSE lifted 0.2 per cent. Australia's major miners rose in London trade with shares in BHP Billiton up by 0.9 per cent while Rio Tinto edged higher by 0.1 per cent.
US sharemarkets ended modestly higher on Friday. Investors monitored both the situation in Ukraine and mixed economic data while they were wary about taking on new positions ahead of a holiday weekend. The Dow Jones index rose by 19 points or 0.1 per cent with the S&P 500 index up by 0.3 per cent to record highs while the Nasdaq lifted by 22.6 points or 0.5 per cent to 14-year highs. Over the week the Dow gained 0.6 per cent while the S&P 500 lifted by 0.7 per cent and the Nasdaq gained 0.9 per cent.
US treasury prices were little changed on Friday ahead of a holiday weekend. US 2-year yields fell by 2 points to 0.492 per cent while US 10-year yields were flat at 2.344 per cent. Over the week US 2-year yields fell by 2.5 points while US 10-year yields fell by 4.5 points.
Major currencies ended weaker against the US dollar after European and US sessions on Friday. The euro fell from highs near $US1.3195 to around $US1.3130, before ending US trade at the day's lows. The Australian dollar eased from highs near US93.60c to lows near US93.25c before ending the US session close to US93.35c. The Aussie is near US93.20c this morning. And the Japanese yen eased from 103.76 yen per US dollar to JPY104.10, ending US trade near JPY104.05.
World oil prices rose on Friday on fears that Western nations may impose more sanctions on Russia. Brent crude rose by US73c or 0.7 per cent to $US103.19 a barrel and the US Nymex price lifted by $US1.41 a barrel or 1.5 per cent to $US95.96 a barrel. Over the week Brent rose by US90c a barrel or 0.9 per cent while US Nymex gained $US2.31 or 2.5 per cent.
Base metal prices rose by up to 0.8 per cent on Friday with nickel leading the way. But lead bucked the trend, down by 0.2 per cent. Over the week, base metal prices were mixed with gains or losses not exceeding 1.4 per cent. Gold prices fell on Friday with the Comex gold futures quote down by $US3.00 or 0.2 per cent to $US1,287.40 per ounce. Over the week gold rose by $US7.20 an ounce or 0.6 per cent. Iron ore rose by US60c or 0.7 per cent on Friday to $US87.90 a tonne. But over the week iron ore fell by $US2.20.
Ahead: The Australian sharemarket is expected to get off to a flat start. US and European markets only rose modestly on Friday and investors would be reluctant to push our market too far in any direction ahead of a public holiday in the US on Monday.
In Australia, the Business Indicators publication is released with the RP Data Home Value index, TD Securities inflation gauge and Performance of Manufacturing index. In China the purchasing managers’ index is released. In the US, markets are closed for a public holiday.
Craig James is chief economist at Commsec.