With the US closed on Friday night, trading volumes across the rest of the world were understandably lighter than normal, but that didn’t stop the European and Asian markets from enjoying a very solid week (like Wall Street did overnight Thursday, our time).
MSCI’s broad index of Asia-Pacific shares outside of Japan ended up 0.2% on Friday and nudged its highest levels since May 2011.
The index jumped 1.7% and had its eighth weekly rally in a row, the longest ‘up’ streak since 2012.
Japan’s market rose 2.3% last week and the Nikkei ended Friday on a five and a half month high.
European shares eased on Friday after the late gains Thursday in the wake of the solid US jobs report for June.
The Stoxx Euro 600 index rose 1.8% last week, its biggest weekly advance since March.
The Australian market ended higher thanks to the gain on Thursday.
The ASX 200 rose 1.47% last week and will start this week later today on an up note with a small rise of 13 points suggested by the closing level of the share price futures contract.
The new three-year peak for Asian markets saw MSCI’s All World share index (including Japan), which tracks sharemarkets across 45 countries, set its fourth consecutive record high.
The US dollar rose (the Aussie weakened to end at 93.65), US bond yields hit a two month high and copper had another strong week and is now up 7% in the past fortnight.
The bullishness was of course helped by the Dow passing through the 17,000 point level, and the benchmark S&P 500 rise to sight of the 2,000 level.
US Treasury yields boosted the value of the US dollar with the 10 year yield closing on 2.64% – just over two weeks ago they were at 2.44%.
Problems continued on the Lisbon exchange where continuing concerns about the health of a major bank group continue to worry investors.
And fears about banks have sent exchanges in Bulgaria and Romania lowever.
The biggest loser of the day was Vienna’s ATX index which slid more than 3% after Erste bank, the third-biggest lender in eastern Europe, plunged 15% after warning that government policy changes and other problems in Romania and Hungary would drive it to a record loss.
The Swedish central bank chopped interest rates by 0.5% to 0.25% in a surprise move, ending the attempt to try and control a consumer borrowing boom by keeping interest rates high.
With deflationary fears rising, the central bank seems set to impose macro prudential controls on home lending by financial groups to try and slow the boom.
Norway, which also has a high interest monetary policy, will be under pressure to cut its key official rate now and impose other controls on home lending.
In Commodities, limited trading on Friday night saw the price of Brent crude end the week with its biggest loss in six months.
It fell 2.4% last week and ended at $US110.62.
US oil futures trading was closed in the US, but there was electronic trading in Asia and Europe.
West Texas Intermediate August delivery was at $US103.76 a barrel in electronic trading on down 30 cents.
Oil was down for the week to Thursday in the US as well.
Gold traded in London at $US1,319.94 an ounce, up from $US1,319.53 on Thursday.
In limited electronic trading in the US Comex August gold futures rose 0.1% to $US1,321.30 an ounce.
