Financial markets start 2014 softly but without disaster
US equity markets was largely flat on Friday night, extending the soft start to the year. Trading was thin, given the holiday season and snowstorms in New York and Boston.
European shares rose, with the Euro Stoxx rising 0.5%. The Dow gained 0.2%, the S&P500 was flat, while the Nasdaq fell 0.3%.
US treasuries were little changed following the mixed signals from Fed officials on the outlook for tapering and the lack of clear direction from share markets.
The US dollar extended gains against a basket of currencies, rising to a one-month high. The euro weakened after performing strongly over 2013.
The Australian dollar edged higher and touched above 90 US cents despite broader strength in the US dollar, and weaker than expected Chinese data on Friday.
Commodity prices were mixed. Gold prices rose to a two-week high, likely reflecting weaker share markets.
The CRB index edged slightly lower. Copper weakened on disappointing Chinese data and oil prices fell on anticipation of Libyan supply.
There were no domestic data releases on Friday.
The non-manufacturing PMI fell from 56.0 to 54.6 in December the lowest reading in four months.
Taken with a fall in the corresponding manufacturing PMI, economic activity appears to have cooled towards the end of 2013.
That said, the Chinese economy still appears on track to post growth of around mid-7%, close to the government's target growth.
The PMI construction index fell from 62.6 to 62.1 in December.
The index remains close to its highest in six years.
Fed officials sent some mixed messages on the outlook for quantitative easing over the weekend.
Outgoing Fed Chairman Bernanke was cautious on the outlook and said that the overall recovery "clearly remains incomplete" and that the Fed is committed to stimulus as long as needed.
Meanwhile, Philadelphia Fed president Plosser (a voting member this year) has raised the prospect of more aggressive in tightening policy, including increasing the speed of tapering and raising interest rates more quickly.