Australia Stock Market Report – Morning August 25, 2014

Stock market indices — A pedestrian holding her mobile phone looks at an electronic board showing graphs of various countries' stock market indices outside a brokerage in Tokyo July 22, 2014. Reuters

* In US economic data, the weekly Economic Cycle Research Institute index fell from a 3.6% annual rate to 2.8%.

* US Federal Reserve chair, Janet Yellen, said that US job markets still hadn't recovered fully from the global financial crisis and policymakers must be cautious in starting the process of lifting interest rates.

* European shares fell on Friday in response to on-going tensions between Ukraine and Russia. The FTSEurofirst 300 index fell by 0.3% with the German Dax down by 0.7% while the UK FTSE lost 2.4 points or less than 0.1%. Australia's major miners fell in London trade with shares in BHP Billiton down by 1.4% while Rio Tinto lost 1.2%.

* US sharemarketsended mixed on Friday. The on-going Ukraine-Russia tensions unsettled investors. And investors remain no clearer on when the Federal Reserve will start lifting interest rates. The Dow Jones index lost 38 points or 0.2% with the S&P 500 index down by 0.2% while the Nasdaq actually gained almost 6.5 points or 0.1%. Over the week the Dow gained 2.0% while the S&P 500 lifted by 1.7% and the Nasdaq gained 1.6%.

* US treasury priceseased slightly on Friday (yields higher) with investors mulling comments from Janet Yellen while watching developments in Eastern Europe. US 2 year yields rose by 1 point to 0.492% while US 10 year yields were flat at 2.40%. Over the week US 2 year yields rose by 8 pointswhile US 10 year yields rose by 1 point.

* Major currencies ended weaker against the US dollar after European and US sessions on Friday. The Euro fell from highs near US$1.3300 to around US$1.3220, before ending US trade near US$1.3240. The Aussie dollar eased from highs near US93.30c to lows near US92.95c before ending the US session close to US93.10c. And the Japanese yen eased from 103.48 yen per US dollar to JPY104.18, ending US trade near JPY103.92.

* World oil prices fell on Friday in response to a stronger greenback and plentiful global crude oil supplies. But tensions between Ukraine and Russia stemmed declines. Brent crude fell by US34c or 0.3% to US$102.29 a barrel and the US Nymex price eased by US31c a barrel or 0.3% to US$93.65 a barrel. Over the week Brent fell by US$1.24 a barrel or 1.2% while US Nymex lost US$3.70 or 3.8%.

* Base metal prices fell up to 0.5% on Friday but copper bucked the trend, up 0.9%, with aluminium up 0.4%. Over the week, base metal prices rose up to 3.7% with zinc leading the way, but tin fell by 1.6%. Gold prices rose on Friday with the Comex gold futures quote up by US$4.80 or 0.4% to US$1,280.20 per ounce. Over the week gold fell by US$26.00 an ounce or 2.0%. Iron ore fell by US$1.80 or 2.0% on Friday to US$90.10 a tone. And over the week iron ore fell by US$3.10.

Ahead: In Australia, no major economic data is scheduled. In the US, new home sales, the National Activity index and Markit services "flash" index are released.