Australia Stock Market- Morning Report 02/14/2012
The head of China´s $410 billion sovereign wealth fund, China Investment Corporation, said European government bonds were not an ideal investment for long-term investors. The CIC chief Lou Jiwei said that Germany´s Chancellor Angela Merkel asked CIC and other long-term investors to buy Euro government debt on a recent trip to China.
US President Barack Obama has outlined budget proposals for the 2013 fiscal year. The annual budget deficit was projected at $1.33 trillion in fiscal 2012, or 8.5 percent of gross domestic product, falling to $901 billion in 2013, or 5.5 percent of GDP.
European shares rose on Monday as investors were encouraged by the solid vote in the Greek parliament in favour of austerity measures and a deal with private Greek creditors. Shares in Cable & Wireless rose by 44.5pct after Vodafone said it was considering a bid for the group. The FTSEurofirst index rose by 0.7pct, with the UK FTSE up by 0.9pct while the German Dax gained 0.9pct.
US sharemarkets rose on Monday with investors relieved by the Greek vote on austerity measures. Banks were higher with Bank of America up 2.5pct with Citigroup up 0.1pct. Shares in Apple hit $500 for the first time and were up 1.4pct. At the close of trade, the Dow Jones was higher by 72 points or 0.6pct with the S&P 500 up by 0.7pct while the Nasdaq gained 27pts or 0.9pct.
US treasuries were little changed on Monday. While investors were encouraged by the Greek vote, all eyes are on Tuesday´s meeting of Eurozone finance ministers to approve the budget measures. US 2yr yields were flat near 0.28pct and US 10yr yields rose by 1pt to 1.99pct.
The US dollar eased against the Euro and commodity currencies in early European trade but regained losses over the US session. The Euro fell from highs near US$1.3280 to US$1.3200, and was near US$1.3190 in late US trade. The Aussie dollar fell from highs around US107.75c to US107.20c, and was near US107.35c in late US trade. But the Japanese yen lifted from 77.74 yen per US dollar to JPY77.39 and was near JPY77.56 in late US trade.
World crude oil prices reversed the previous session´s losses on Monday as investors expressed relief over the successful Greek vote on austerity measures. Nymex oil rose by US$2.24 or 2.3pct to US$100.91 a barrel and London Brent crude rose by US62c to US$117.93 a barrel.
Base metal prices eased modestly on Monday, falling between 0.2-1.7pct as the greenback rebounded against major currencies over the European and US trading sessions. Aluminium fell the most while tin was the best performer. And the gold price fell slightly on Monday with Comex April gold down US40c to US$1,724.90 an ounce.
Ahead: In Australia, the NAB business survey is released. GWA Group, Paladin Energy, SAI Global and Western Areas report earnings. In the US, retail sales data is scheduled. Eurozone ministers meet to approve Greek budget cuts.