The huge rebound on Thursday in the wake of the latest ‘settlement’ of the European financial crisis ran out of puff on Friday as cracks started appearing in Germany and Italy, and investors pulled back ahead of another big week.
But before all that we will probably get the forced sale of US CFD, futures, and share broker, MF Global, which is broke, owes well over $US 1 billion and is being hawked around to a number of US banks.
Market finished with smaller gains on Friday, but big rises for the week and October (which finishes tonight) looks like being the best month for some markets for years.
The Australian market finished with a gain of more than 5%, well above the gain made by Wall Street and the 4%-plus gain made by Europe.
The Australian dollar ended above $US1.07 and hit a two month high in trading as the euro continued to rise against a weaker greenback.
The weakening greenback helped gold, copper and oil end the week with solid gains of 6% to 15%.
The euro slipped 0.2 percent to $US1.4161 on Friday, down from a seven-week high of $US1.4247 set on Thursday.
The euro is up 5.8% against the greenback so far in October, while the Aussie dollar is up 14 US cents from the low in early August of just over 93 US cents.
The US Federal Reserve and the European Central Bank hold meetings and news conferences afterwards: the ECB is expected to cut rates, the US will sit pat with US economic data looking better.
Friday saw the first estimate for US economic growth in the third quarter.
But the Group of 20 leaders meet Thursday and Friday in Cannes, France and would be expected to endorse the latest bailout plan from the EU and the eurozone.
But that will be difficult, with the plan still in outline only and so many unanswered questions about whether they money will come from, how much will be contributed, the dangerous structure of the bailout fund model being proposed and worries about a legal challenge in Germany, and a surge interest costs on Italian and Spanish debt, even before the bailout has been settled.
And there’s also the US employment report for October, to be released on Friday night our time, which could have some goodish news for a second month in a row.
But again it could delivery bad news, with more to come this month and December with thousands of bank and manufacturing jobs going in job cuts announced during the third quarter earnings season.
Spot gold retreated to around $US1,741 an ounce on New York overnight Friday from a one-month high of $US1,751.99.
Brent crude oil in London fell, while WTI in New York also eased a fraction.
In New York, the Dow ended up 22.56 points, or 0.2%, to close up to 12,231.11 overnight Friday, for a gain of 3.6% for the week.
It was the fifth positive weekly gain.
The S&P 500 closed a touch higher, but added 3.8% for the week.
The Index added just half a point to 1,285.09.
The Nasdaq Composite fell 1.48 points On Friday to close at 2,737.15, a level that has it up 3.8% on the week.
The Australian market should see a small gain at the start of trading today.
The SPI 200 futures ended up 13 points in overnight trading on Friday to 4362.
Despite ending the day almost flat on Friday, the ASX registered its best week in more than two years.
The 5.1% weekly gain was the biggest since July 2009, when the market was rebounding from the GFC.
Elsewhere in Asia there Japan’s Nikkei rose 1.4% on Friday, Hong Kong’s Hang Seng Index added 1.7%, and the Shanghai Composite Index rose 1.6%.
South Korea’s Kospi and Australia’s ASX 200 index ended with more modest gains, up 0.4% and 0.1%, respectively.
For the week, besides Australia’s strong rise, the Hang Seng Index added 11.1%, the Nikkei Average was up 4.3%, the Kospi was up 5%, and the Shanghai Composite jumped a solid 6.7%, despite continuing reports of an expanding credit crunch in China and fears about small companies.
In Europe,the 4% gain for the Stoxx 600 followed rises in 17 of the 18 major markets in Western Europe.
London’s FTSE jumped 3.9%, France’s CAC 40 Index added 5.6% and Germany’s DAX Index increased 6.3%.
Portugal’s PSI-20 index was the only one to end the week down, falling 0.8%.
In commodities gold futures closed slightly lower Friday night, breaking a five way winning streak.
Comex December gold futures lost 50 cents to end at $US1,747.20 an ounce in New York.
Other metals finished mostly higher Friday, and had gains for the week.
Comex December silver futures rose 18 cents, or 0.5%, to end at $US35.29 an ounce.
That left silver up by 13% for the week.
Comex December copper added 1 cent on Friday in New York to end at $US3.71 a pound, a rise of 15% for the week.
And in oil, London Brent December crude fell $US2.17 to settle at $US109.91 a barrel.
Brent posted a 35-cent weekly gain, after a 4.5% loss in the previous week.
In New York, Nymex December crude fell 64 cents to settle at $US93.32 a barrel.
That was a gain of 6.7% over the week, the biggest for more than nine months.
