The Australian sharemarket is poised for a softer start after weak sessions on Friday in Europe and North America. Geopolitical jitters dominate including concerns over Russia, Ukraine, Argentina and Gaza. The futures market is tipping a 26 point fall for the ASX 200 at the start of trade and that seems appropriate given the declines seen in the US.
In US economic data, non-farm payrolls (employment) rose by 209,000 in July, just short of forecasts tipping a 233,000 lift in jobs. The unemployment rate rose from 6.1 per cent to 6.2 per cent. Personal income rose 0.4 per cent as expected in June. The ISM purchasing managers index rose from 55.3 to a 3-year high of 57.1 in July, above the forecast of 56.0.
The Chinese non-manufacturing (services) purchasing managers index eased from 55.0 to 54.2 in July.
European shares fell to six-week lows on Friday with investors focussed on Russian sanctions, the Argentina debt default and assistance by the Portuguese Government to Espirito Santo. The FTSEurofirst 300 index fell by 1.2 per cent with the German Dax down by 2.1 per cent while the UK FTSE lost 0.8 per cent. Australia's major miners were also lower in London trade with shares in BHP Billiton down by 0.9 per cent while Rio Tinto lost 1.1 per cent.
US sharemarkets fell on Friday as investors digested a raft of economic indicators and geopolitical events. The Dow Jones index lost 70 points or 0.4 per cent with the S&P 500 index down by 0.3 per cent while the Nasdaq lost 17 points or 0.4 per cent. Over the week the Dow lost 2.8 per cent while the S&P 500 fell by 2.7 per cent while the Nasdaq lost 2.2 per cent.
US treasury prices rose on Friday (yields lower) as data showed job creation fell short of forecasts in July. US 2-year yields fell by 7 points to 0.476 per cent while US 10-year yields were down by 7 points to 2.494 per cent. Over the week US 2-year yields fell by 3 points while US 10-year yields rose by less than 1 point.
Major currencies were firmer against the US dollar following weaker-than-expected US jobs data. The euro rose from lows near $US1.3380 to around $US1.3440, before ending US trade near $US1.3430. The Aussie dollar lifted from lows near US92.70c to highs near US93.30c before ending the US session close to US93.10c. And the Japanese yen rose from 103.02 yen per US dollar to JPY102.34, ending US trade near JPY102.61.
World oil prices fell on Friday on fears that a raft of geopolitical issues could serve to crimp energy demand. Brent crude fell by $US1.18 or 1.1 per cent to $US104.84 a barrel and the US Nymex price fell by US29 cents a barrel to $US97.88 a barrel. Over the week Brent fell by $US3.55 a barrel or 3.3 per cent while US Nymex lost $US4.21 a barrel or 4.1 per cent.
Base metal prices fell by between 0.3-1.7 per cent on Friday with tin down the most and lead down the least. Over the week, base metal prices fell up to 4.2 per cent after rising up to 4.5 per cent the previous week. Gold prices rose on Friday in response to geopolitical jitters. The Comex gold futures quote rose by $US12.00 or 0.9 per cent to $US1,294.80 per ounce. Over the week gold fell by $US8.50 an ounce. Iron ore fell by US40c on Friday or 0.4 per cent to $US95.20 a tonne. But over the week, iron ore rose by US90c.
Ahead: In Australian data, the ANZ job advertisements series is released with retail trade figures. In the US, the ISM New York index is released.
Craig James is chief economist at Commsec.