In Australia, the SPI futures point to gains of 0.1 per cent for today's trading, but the Bank of Japan decision should provide the market with more strength throughout the session, particularly when Asian markets start trading. High yielding stocks will be in focus.
In the US, personal income rose by 0.2 per cent in September with spending down by 0.2 per cent. Both results were slightly weaker than expected. The final reading on consumer sentiment in October was 86.9, up from 84.6 and at a 7-year high.
The Bank of Japan announced it will buy 80 trillion yen of government bonds each year, up from 60-70 trillion yen.
The Chinese manufacturing purchasing managers’ index eased from 51.1 to 50.8 in October.
European shares posted solid gains with investors encouraged by extraordinary measures taken by Japanese authorities to boost economic growth. The FTSEurofirst 300 index rose by 1.8 per cent, the UK FTSE rose by 1.3 per cent and the German Dax gained 2.3 per cent. In London trade shares in BHP Billiton fell 0.3 per cent with Rio Tinto up 0.8 per cent.
US sharemarkets rose sharply on Friday with the Dow Jones and S&P 500 indexes at record highs. Investors were encouraged by the Bank of Japan's move to purchase more assets. The Dow Jones rose by 195 points or 1.1 per cent with the S&P 500 index up by 1.2 per cent while the Nasdaq rose by 64.6 points or 1.4 per cent. Over the week the Dow Jones rose by 3.4 per cent, the S&P 500 index was up by 2.7 per cent and the Nasdaq rose by 3.3 per cent.
US treasury prices eased modestly on Friday (yields higher) as equities markets rose to record highs and Japan unveiled monetary stimulus measures. US two-year yields were up by 1 point to 0.497 per cent while US 10-year yields were up by 3 points to 2.335 per cent. Over the week US two-year yields rose by almost 11 points and US 10-year yields rose by over 7 points.
Major currencies fell against the US dollar in Europe and the US on Friday. The Euro eased from highs near $US1.2590 to lows near $US1.2490, ending US trade near $US1.2525. The Aussie dollar fell from highs near US88.45c to highs near US87.60c before ending the US session near US88c. The Aussie is near US87.45c today. The Japanese yen slumped from 109.27 yen per US dollar to ¥112.50, ending US trade near ¥112.28.
World oil prices fell on Friday as monetary stimulus in Japan boosted the US dollar, making it more expensive for commodity buyers in Europe and Asia. Brent crude fell by US38c to $US85.86 a barrel while the US Nymex crude price fell by US58c or 0.7 per cent to $US80.54 a barrel. Over the week Brent fell by US27 cents while Nymex crude lost US47c.
Base metal prices rose by up to 0.6 per cent on the London Metal Exchange on Friday. But tin fell 2.1 per cent and copper lost 0.7 per cent. Over the week prices rose up to 5.2 per cent. Gold slumped to 4-year lows on Friday on Japan's stimulus measures. Comex gold futures fell by $US27 an ounce or 2.3 per cent to $US1,171.60 per ounce. Over the week, gold lost $US60.20 or 4.9 per cent. Iron ore fell US50c on Friday or 0.6 per cent to $US78.50 a tonne and lost $US1.30 over the week.
Ahead: In Australia, data on home prices, job ads and the inflation gauge are released. In the US, car sales, the ISM manufacturing index and construction spending are released. In China the HSBC purchasing managers index is issued.
Craig James is chief economist at CommSec.