Australian Stock Market - Morning 08/29/2011
US Federal Reserve chairman Ben Bernanke didn´t unveil fresh stimulus measures in a speech delivered on Friday but said that the central bank was ready to use additional tools to boost growth. The September policy meeting has been extended to two days to consider new measures.
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The US economy grew at a 1.0pct annualised pace in the June quarter, below the 1.1pct consensus forecast and the initial estimate of 1.3pct growth. And consumer sentiment lifted from the preliminary reading of 54.9 to 55.7 in August.
European shares eased on Friday but losses were trimmed after the speech by Ben Bernanke. The FTSEurofirst index fell by 0.7pct while the German Dax was down by 0.8pct and the UK FTSE was flat (down less than 0.1pct).
US sharemarkets rose on Friday on hopes that the Federal Reserve policymakers would agree on more stimulus for the economy. The Dow Jones rose by almost 135pts or 1.2pct with the S&P 500 up by 1.5pct and the Nasdaq gained 60pts or 2.5pct. Over the week the Dow rose by 4.3pct and the S&P 500 rose by 4.7pct while the Nasdaq lifted by 5.9pct.
US long-term treasury yields fell on Friday after the Fed chairman flagged stimulus measures. US 2yr yields fell by 2pts to 0.196pct and US 10yr yields fell by 5pts to 2.19pct. Over the week US 2yr yields were steady while US 10yr yields rose by 13pts.
The US dollar fell against major currencies on Friday after Ben Bernanke suggested that more stimulus would be forthcoming. The Euro rose from lows near US$1.4335 to US$1.4500, ending the US session near session highs. The Aussie dollar rose from lows around US104.60c to US105.90c, ending US trade near US105.75c. And the Japanese yen lifted from lows of 77.20 yen per US dollar in the European session to near JPY76.50. But after weakening to JPY77.05, the Japanese yen reversed course again in late US trade to end at JPY76.65.
US crude oil prices rose in line with other commodities on Friday as the US dollar fell. Nymex crude oil rose by US7c or 0.1pct to US$85.37 a barrel and London Brent crude rose by US74c to US$111.36 a barrel. Nymex was up by 3.8pct over the week with Brent up 2.5pct.
Base metal prices rose on the London Metal Exchange on Friday in response to a weaker greenback. Metals rose between 0.5-3.5pct with lead and nickel doing best. Over the week metal prices posted strong gains between 1.0-8.0pct with lead faring best and aluminium up the least. And the gold price rose in line with other commodities on Friday with the Comex December gold up by US$34.10 an ounce or 1.9pct to US$1,797.30. Gold fell by US$54.90 or 3.0pct over the week after lifting 6.3pct the previous week.
Ahead: In Australia, data on new home sales is released. Goodman Fielder and QR National are amongst those to issue earnings results. In the US, data on personal income and spending and pending home sales figures are released.