The surging Aussie dollar will occupy minds this week, although the June jobs figures will be the major event locally.
The dollar closed at 78.38 US cents early Saturday, boosted by weak inflation and retail sales data in the US which cast doubt on the Fed’s current interest rate policy.
It was the Aussie dollar’s best weekly performance since May 2015 and saw the currency up just on 3% for the week. It will put the shares of major exporters under some pressure tough.
The Aussie sharemarket is looking for a small 14 point gain later this morning after a solid day on Friday on Wall Street.
The ASX 200 Index and the All Ordinaries Index each closed up 0.5% on Friday, and up 1.1% over the week to close at 5765.1 points and 5808.7 points, respectively.
On Wall Street, the S&P 500 closed at a fresh record high on Friday, while a rebound in tech stocks saw the Nasdaq enjoy its best week this year so far.
The S&P 500 ended Friday 0.5% higher at 2,459.27 — ending at a record level for the first time since June and for a weekly gain of 1.4%.
The Dow ended at a closing high for a third straight day and rose 1% over the week to 21,637.74.
The Nasdaq Composite rose 0.6% on Friday and 2.6% over the week to 6,312.46 for its best week since December.
US consumer inflation eased and retail sales fell (both for June). The fall in core inflation for June was not expected and the weakness of both data sets has again raised doubts about the Fed’s plans to lift rates a third time this year.
The US Consumer Price Index rose an annualised 1.6% cent in June — down from 1.9% in May and lower than the 1.7% forecast by economists and well below the 2% target of the Fed.
The 10-year US Treasury yield fell as much as 6 basis points to 2.28%, the lowest since last month, before the rally moderated to end the US government’s benchmark borrowing costs at 2.33%
The drop weighed on bank stocks as they benefit from higher interest rates, but despite reporting better than expected corporate earnings on Friday, JPMorgan’s shares eased nearly 1% while Bank of America and Wells Fargo – fell by 1.7% and 1.1%, respectively.
