In US economic data, non-farm payrolls (employment) rose by 142,000 in August, short of forecasts tipping a 226,000 gain. But the unemployment rate fell from 6.2 per cent to 6.1 per cent as the participation rate fell from 62.9 per cent to 62.8 per cent. Average earnings rose by 0.2 per cent but average hours worked were unchanged.
European shares were mixed on Friday. While US economic data was weaker-than-expected and some investors chose to book profits, stocks exposed to Russia rose after Ukraine and pro-Russian rebels agreed to a ceasefire. The FTSEurofirst 300 index fell by 0.4 per cent from six-and-a-half-year highs, with the German Dax up by 0.2 per cent while the UK FTSE lost 0.4 per cent. Australia's major miners were lower in London trade with shares in BHP Billiton down by 0.4 per cent while Rio Tinto lost 0.6 per cent.
US sharemarkets rose on Friday. While investors were sceptical about the weakness of the employment data, they concluded that policymakers would leave interest rates at low levels as a result. The Dow Jones index settled higher by almost 68 points or 0.4 per cent. The broader S&P 500 index rose by 0.5 per cent to record highs while the Nasdaq rose by almost 21 points or 0.5 per cent. Over the week both the Dow and S&P 500 rose by 0.2 per cent, with the Nasdaq up 0.1 per cent.
US short-term treasury prices rose on Friday (yields lower) after investors concluded that US policymakers wouldn't be in a rush to lift interest rates after soft employment data. US 2-year yields fell by 3 points to 0.508 per cent while US 10-year yields were steady near 2.46 per cent. Over the week US 2-year yields fell by 2.5 points while US 10-year yields rose by 3.5 points.
Major currencies rose against the US dollar over the European and US sessions on Friday. The euro rose from lows near $US1.2930 to around $US1.2980, before ending US trade near $US1.2950. The Australian dollar rose from lows near US93.35c to highs just below US94.00c before ending the US session near US93.75c. And the Japanese yen lifted from ¥105.36 per US dollar to ¥104.68, ending US trade near ¥105.08.
World oil prices eased on Friday in response to the weaker-than-expected US jobs data. In addition Ukraine and pro-Russian rebels agreed to a ceasefire on Friday. Brent crude fell by $US1.01, or 1.0 per cent, to $US100.82 a barrel with the US Nymex price down by $US1.16 a barrel to $US93.29 a barrel. Over the week Brent fell by $US2.37, or 2.3 per cent, with the Nymex price down by $US2.67, or 2.8 per cent.
Base metal prices were generally lower by up to 1.1 per cent on Friday, with lead down the most. But nickel bucked the trend, up by 0.9 per cent with copper up 0.6 per cent. Over the week metal prices were mixed, with nickel up 4.1 per cent, but lead fell by 2.2 per cent. Gold prices rose slightly on Friday, with the Comex gold futures quote up by US80c, or 0.1 per cent, to $US1,267.30 per ounce. Over the week gold fell by $US20.10 an ounce. Iron ore fell by US70c, or 0.8 per cent, on Friday to $US83.60 a tonne. Over the week iron ore fell by $US4.30 a tonne.
Ahead: The local sharemarket is expected to get off to a mixed start with a firmer US sharemarket supporting industrial stocks but weaker mining and energy prices weighing on the resources sector. In Australia, the ANZ job advertisement series is released. In China, the August trade data is released. In the US, consumer credit data and the employment trends report are released.
Craig James is chief economist at Commsec.