Scoreboard: German jitters

In the US, import prices fell by 0.5 per cent in September (forecast 0.7 per cent fall) while export prices fell by 0.2 per cent (forecast 0.1 per cent fall).

European shares fell sharply on Friday on continued concerns about the health of the German, and the broader European economy. According to Reuters, a Lipper poll of 109 US-domiciled funds invested in European stocks showed net outflows of $329 million last week, the biggest weekly redemptions since mid-August. The FTSEurofirst 300 index fell by 1.6 per cent while the UK FTSE lost 1.4 per cent and the German Dax slumped by 2.4 per cent. And Australia's major miners were weaker in London trade with shares in BHP Billiton down by 3.1 per cent while Rio Tinto lost 2.9 per cent per cent.

US sharemarkets fell in afternoon trade led by the technology sector. Shares in Microchip Technology fell by 12.3 per cent after warning of weaker industry demand. After being up by 98 points, the Dow Jones sold off in the afternoon to close near the day's lows. The Dow Jones fell by 115 points or 0.7 per cent with the S&P 500 index down by 1.1 per cent while the Nasdaq lost 102 points or 2.3 per cent. Over the week the Dow Jones lost 2.7 per cent with the S&P 500 down 3.1 per cent while the Nasdaq lost 4.5 per cent.

US treasury prices rose on Friday (yields lower) as investors continued to shift funds from equities to safe-haven assets like government bonds and gold. US two-year yields were down 3 points to 0.428 per cent while US 10-year yields were down 3 points to 2.286 per cent. Over the week US two-year yields fell by 11 points and US 10-year yields fell by almost 14 points.

Major currencies were generally softer against the greenback over European and US sessions on Friday. But the US dollar index had its first weekly decline in 3 months. The Euro fell from highs near $US1.2705 to lows near $US1.2605, ending US trade near $US1.2625. The Aussie dollar fell from highs near US87.85c to lows around US86.80c, ending the US session near US86.85c. But the Japanese yen lifted from ¥108.14 per US dollar to ¥107.60, ending US trade near ¥107.65. The Euro is near $US1.2650 this morning, Aussie US86.90c and yen at ¥107.56. 

World oil prices rose slightly on Friday, recovering from multi-year lows on short-covering at the end of the week. During the session Brent crude hit 4-year lows while Nymex was at 27-month lows. Brent crude rose by US16c to $US90.21 a barrel while the US Nymex crude price rose by 5c to $US85.82 a barrel. Over the week Brent fell by $2.10 or 2.3 per cent while Nymex crude fell by $US3.92 or 4.4 per cent.

Base metal prices fell by up to 1.8 per cent on Friday with nickel leading the declines. Over the week, prices were mixed with zinc up 2.2 per cent but nickel fell by 1.1 per cent. Gold fell with the Comex gold futures quote down by $US3.60 an ounce or 0.3 per cent to $US1,221.70 per ounce. Over the week, gold rose by $US28.80 or 2.4 per cent. Iron ore was up by US40c on Friday or 0.5 per cent to $US79.90 a tonne and gained $US1.00 over the week.

Ahead: Aussie share set to get off to a weaker start following falls in US & European markets. The futures market is tipping a 38 point fall at the start of trade. Chinese trade data to be released at 1pm Sydney time will be in focus. In Australia, lending finance data is released together with credit and debit card figures. In the US, the Columbus Day holiday is observed but the New York Stock Exchange is open.