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need2know: Wall Street boost for ASX

Local shares poised for a strong start to the week after Wall Street posted record closing highs on Friday.
Nanjing Night Net

What you need2know

SPI futures up 31 points or 0.6% to 5489

AUD at 76.19 US cents, 77.68 Japanese yen, 68.71 Euro cenbts and 58.21 British pence

On Wall St, Dow +1%, S&P 500 +0.9%, Nasdaq +1.1%

*Record closing highs for both the S&P 500 and Nasdaq

In New York, BHP +2.6%, Rio +0.9%, Atlassian +6.4%

In Europe, Stoxx 50 +1.4%, FTSE +0.8%, CAC +1.5%, DAX +1.4%

Spot gold -1.9% to $US1336 an ounce

Brent crude +0.2% to $US44.36 a barrel

Iron ore +2.1% to $US60.74 per tonne

What’s on today

ANZ job ads July, Bendigo and Adelaide Bank results

Currencies

The greenback climbed versus major currencies on Friday, posting its biggest weekly gain since June versus the euro as the July jobs data bolstered prospects that US interest rates may rise before the end of the year.

The Bloomberg Dollar Spot Index, which tracks the currency against 10 major peers, rose 0.3 per cent as of 5pm in New York. The greenback gained 0.4 per cent to $US1.1086 per euro, and 0.6 per cent to 101.82 yen. Its 0.8 per cent weekly gain versus the euro is tied for the steepest rally since the week of the UK vote to leave the European Union.

The market-implied probability of a rate increase this year rose to 48 percent, from about 36 percent in the minutes before the release of the labor figures, futures data show.

Commodities

Aluminium climbed as inventories tracked by exchanges in London and Shanghai declined, signalling tighter supplies. Stockpiles of aluminium held in Shanghai Futures Exchange warehouses fell last week to the lowest since 2011 and those tracked by the London Metal Exchange had the biggest weekly drop since 2006. Aluminium for delivery in three months climbed 1.4 per cent to settle at $US1645 a tonne at 5.50pm on the LME, posting a second straight weekly gain.

Copper fell as Goldman Sachs said a “supply storm” is coming and predicted prices will fall to $US4000 a tonne over 12 months. Prices dropped 0.9 per cent to $US4789, bringing the loss for the week to 2.8 per cent.  Copper has lagged behind gains in other raw materials this year, especially zinc and nickel, which benefited from forecasts for global shortages. For copper, there’s been solid growth in global mine supply in the first half and that trend is expected to pick up in the coming quarters, according to Goldman.

US oil drillers added rigs for the sixth-straight week, marking the longest period of expansion in a year as the shale patch revives from the worst downturn in a generation. Rigs targeting crude in the US rose by 7 to 381 in the past week, Baker Hughes said on its website Friday. Explorers have now added 51 rigs since June 24, expanding activity in nine of the past 10 weeks. The rise was prompted by a rebound in prices that peaked in June before falling off again.

Brent for October settlement dropped 2 cents to $US44.27 a barrel on the London-based ICE Futures Europe exchange on Friday. The global benchmark closed at a $US1.70 premium to WTI for October delivery.

As crude trades well below $US50 a barrel, Exxon Mobil, Royal Dutch Shell and other oil giants have seen their debt double to a combined $US138 billion, spurring concerns they’ll need to keep slashing capital spending and that dividend cuts may eventually be necessary. Worse, the mountain of debt, which has grown tenfold since 2008, is likely to increase further in the third and fourth quarters, executives and analysts said.

United States

Payrolls climbed by 255,000 last month, exceeding all forecasts in a Bloomberg survey of 89 economists, following a 292,000 gain in June that was a bit larger than previously estimated, a Labor Department report showed Friday. The jobless rate held at 4.9 per cent as many of the people streaming into the labour force found jobs.

Wage growth offered more promising signs of acceleration, with average hourly earnings rising a more-than-forecast 0.3 per cent from a month earlier, the most since April, to $US25.69. The year-over-year increase was 2.6 per cent in July, the same as in June.

The data propelled US stocks notched their best day in a month on Friday, with the S&P 500 and Nasdaq closing at record highs. The Dow Jones industrial average rose 191.48 points, or 1.04 per cent, to 18,543.53, the S&P 500 gained 18.6 points, or 0.86 per cent, to 2182.85 and the Nasdaq Composite added 54.87 points, or 1.06 per cent, to 5221.12.

Stocks in the Nasdaq rallied for the eighth time in nine days and capped a sixth straight weekly advance, the longest since November.Since firms started reporting earnings a month ago, companies from EBay to Seagate Technology and Biogen have jumped more than 20 per cent.

Europe

The Stoxx Europe 600 Index climbed 1.1 per cent to 341.38 at the close of trading, trimming its weekly loss to 0.2 per cent.

The UK’s FTSE 100 Index climbed 0.8 per cent, after yesterday jumping the most since June. The FTSE 250 mid-cap gauge finally recovered its Brexit losses today. Stocks in so-called peripheral markets posted the biggest advances, with Italy’s FTSE MIB Index jumping 2.4 per cent, Ireland’s ISEQ Index adding 1.8 per cent and Spain’s IBEX 35 Index gaining 1.8 per cent.

What happened Friday

The Australian sharemarket ended the week on a positive, but a midweek slump led by the banks weighed on the index, which posted its first weekly fall in a month.

At close of trade on Friday, the S&P/ASX 200 ended 21.6 points or 0.4 per cent higher at 5496.7, while the All Ordinaries finished 22.2 points or 0.4 per cent higher at 5585.6

The benchmark index began the week rallying towards 5600, but shed 120 points collectively on Tuesday and Wednesday as the market digested the Reserve Bank of Australia’s decision to cut the benchmark interest rate to a record 1.5 per cent.

The index ended the week 1.2 per cent lower, with eight out of 10 sectors finishing in the red.

This story Administrator ready to work first appeared on Nanjing Night Net.

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