Geopolitics Keeps Markets On Edge
Global financial markets start the week with many of the headaches of the past few weeks having been removed on Friday - all that is except the US trade war with China, the EU, Canada and Mexico.
Last week saw financial markets dominated yet again by geopolitical developments with first the turmoil in Italy and and Spain then US trade announcements rattling share markets.
But the on, off summit between the US and North Korea on June 12 is back on again.
And the resolution of political impasses in Spain and Italy on Friday (for the time being) and the good US payrolls report for May helped boost US and Eurozone shares on Friday.
For the week this left US shares up 0.5%, but Eurozone shares down 1.4%, Japanese and Chinese shares down 1.2% and Australian shares down 0.7%.
US bond yields rose late in the week after the Italian and Spain problems were repiared and the jobs report saw another fall in the jobless rate, to 3.8% and 230,000 jobs created.
The jobless rate figure was the lowest for 18 years.
Wages rose by an annual 2.7% from 2.6%, cementing forecasts for a rate rise from the US Federal reserve next week.
Commodity prices were mixed with copper up slightly but oil and iron ore down. Despite the volatility in markets the $A rose slightly to around 75.69 US cents with the greenback little changed.
Wall Street ended trading on Friday on an upbeat note. The S&P 500 ended Friday’s session up 1.1% to 2,734.62. The Dow added 0.9% to 24,635.21, while the Nasdaq rose 1.5% to 7,554.33.
For the week, both the S&P 500 and Nasdaq recorded their second gain in a row, while the Dow dropped 0.48% over four day the holiday-shortened week.
US Treasuries also had an eventful week. The yield on the 10-year bond ended the week at 2.8985%, after touching a low of 2.76% and down from a high of more than 3.1% earlier in May.
Glenn Dyer has been a finance journalist and TV producer for more than 40 years. He has worked at Maxwell Newton Publications, Queensland Newspapers, AAP, The Australian Financial Review, The Nine Network and Crikey.
At the AFR he was a finance writer, Finance Editor, News Editor and Chief of Staff. At the Nine Network he was supervising producer of Business Sunday for more than 16 years. He has also written for other online and analogue print publications here and overseas.