The possibility of further stimulus by the US Fed drove the Aussie market higher last week, however a Friday sell-off dampened the positive sentiment ahead of the latest US jobs data.

The ASX 200 climbed 43 points (+1%) for the week, closing at 4243.

Mining stocks were among the week's leading gainers amid hopes more monetary stimulus will drive commodity prices higher.

BHP Billiton (ASX:BHP) rose 1% and Rio Tinto (ASX:RIO) added 4.2%. Queensland Rail (ASX:QRN) advanced 2% after swinging back to a profit in FY11.

Among the big four, Commonwealth Bank (ASX:CBA) edged up 0.3% after launching a $373 million bid for Count Financial (ASX:COU). National Australia Bank (ASX:NAB) closed up 1.6%.

In the retail space, Harvey Norman (ASX:HVN) put on 1% after it reported a 9% lift in FY11 net profit.

Also making earnings news was CSR Ltd (ASX:CSR), which downgraded its 1H11 guidance due to a restructuring of its Viridian glass business. The group' shares sank 7% for the week.

The big focus this week will be on tomorrow's RBA interest rate decision and the domestic jobs report, which is slated for release on Thursday.

The market is pricing in no change to the official cash rate (currently at 4.75%), whilst the unemployment rate is expected to remain at 5.1%.

Economics

Last week's mixed batch of data revealed an Australian economy still struggling for direction amid the recent market volatility.

On Tuesday, a report showed building approvals rising 1% in July from June. The result missed economist expectations of a 2.1% rise and highlighted continued weakness in the building sector.

However investors were buoyed by Thursday's data, which showed retail sales and private capital expenditure exceeding estimates.

Retail sales rose 0.5% in July, reversing two straight months of declines. The result was driven by increased purchases at department stores.

Private capital expenditure rose 4.9% in the June quarter, beating estimates of a 4.1% gain.

Both results were encouraging and highlighted some resilience among Australian businesses and consumers in the face of global economic uncertainty.

Overseas

Renewed fears over a double dip recession in the US sent global markets into a tailspin on Friday night, reversing the week's earlier gains.

On Friday night, Wall Street was left reeling after data showed the US economy adding no net jobs in August, well below expectations of a 74,000 gain.

The data again highlighted the precarious state of the US economy and saw the Dow finish 0.4% lower for the week. The S&P500 (-0.2%) and Nasdaq (unchanged) also erased their early week advance.

It was a similar outcome on the major European indices, although they at least managed to hold on to their gains.

The battle to contain the region's debt crisis received a setback on Friday, with Greece and its lenders failing to reach an agreement on the country's ability to meet its deficit goals.

For the week, the FTSE added 3.2%, the French CAC put on 2%, whilst the German DAX ended flat.

In the Asian region, the Hang Seng rose 3.2%, the Nikkei advanced 1.7% whilst the Shanghai Composite fell 3.3%.

The prospect of further monetary stimulus in the US drove the key commodities higher. Oil edged up 1.3% whilst gold continued its march towards fresh all-time highs, adding 4.4% for the week.

Base metals were mixed, with aluminium among the best performing (+2.5%).

Weekly Investors Markets Wrap: September 5 is a post from: Australian Stock Report Market Pulse Blog