Australian shares to open lower as European stocks post strongest weekly gain since May
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The news: The Australian sharemarket is set to open lower as global stocks head towards their strongest weekly performance in about two months.
The global strength follows a softer-than-expected US jobs report that dampened expectations of an imminent Federal Reserve hike, weighing on the US dollar and lifting gold.
The numbers: Updated at 7:54am AEST:
- ASX futures: down 35 points to 8,794 points
- Wall Street: Dow Jones up 1.14% on Thursday, S&P 500 flat, Nasdaq down 0.80%
- Europe: FTSE 100 up 0.40% on Friday, CAC 40 up 0.39%, DAX up 0.78%
- Spot gold: up 1.15% to USD4,170 per ounce
- Oil prices: Brent down 0.57% to USD71.69/barrel, US WTI up 0.10% to USD68.83/bbl
- AUD: up 0.03% at 69.40 US cents
- Bitcoin: up 0.02% to USD63,076.
The context: In Europe, the STOXX 600 rose 0.6% to another record high on Friday and was on track for a 2.6% weekly gain, its strongest performance since mid-May, according to Reuters. London’s FTSE 100 added 0.4%, supported by a rebound in mining stocks, while France’s CAC 40 gained 0.4%, led by a 1% rise in energy technology group Schneider Electric.
Asian markets also recovered, with chipmakers driving South Korea’s KOSPI Index up around 6% after a near 10% drop over the previous two sessions. Japan’s Nikkei rose 1.5%, while purchasing managers’ index data pointed to stronger business activity across major Asian economies.
Elsewhere, US job growth slowed sharply in June, and payroll gains for the previous two months were revised lower, according to Labor Department data released on Thursday. The weaker labour market data reduced expectations of a near-term Federal Reserve rate hike and increased the likelihood that rates will remain on hold until October. Gold rose 1% to above USD4,160 ($5,992) an ounce, on track for its first weekly gain since late May, according to Reuters.
The prospect of easing monetary policy also weighed on the US dollar, which was headed for its worst weekly performance since May. Meanwhile, the Japanese yen swung between gains and losses amid speculation authorities may become less predictable in their currency market intervention.
In commodities, Brent crude steadied below USD72 a barrel as traders assessed the prospect of increased oil supply through the Strait of Hormuz and ongoing US-Iran talks.
Locally, the Melbourne Institute will release its June inflation gauge at 11:00am AEST.
