Australian Stock Market - Morning Report 09/16/2011
US consumer prices rose by a larger than expected 0.4pct in August and by 3.8pct over the year. Gasoline prices rose 1.9pct while food prices rose 0.5pct. Core CPI (which excludes food & energy) rose by 0.2pct in August after rising by the same rate in July. In the 12 months through to August, core CPI rose by 2pct. US jobless claims rose by 11,000 to 428,000 last week.
The New York Fed ´´Empire State´´ manufacturing index fell from -7.72 to -8.82 in September. Manufacturing activity has now contracted for four straight months. The Philadelphia Fed business activity index improved to from -30.7 to -17.5 in August. US industrial production rose by a better than expected 0.2pct in August after rising by 0.9pct in July.
European shares rallied for a third straight day to a one week highs on Thursday. German and French leaders said they were determined to keep Greece in the euro zone, while a global central bank program to provide 3-month US dollar loans to European banks supported optimism. Euro zone banks rose 6.3pct with BNP Paribas up 13.4pct. Spain´s IBEX rose 3.6pct after healthy demand for a bond auction. The FTSEurofirst index rose by 2.1pct, the German Dax gained 3.2pct and the UK FTSE rose by 2.1pct.
US sharemarkets rose for a fourth day on Thursday, following a coordinated effort by central banks to increase liquidity for European banks. The Dow Jones finished higher by 186 points or 1.7pct, similarly the S&P 500 rose by 1.7pct while the Nasdaq gained 34pts or 1.3pct.
US long-term treasuries fell on Thursday (yields higher) as the global central bank plan to boost liquidity for European financial firms encouraged investors to move into riskier assets like equities. US 2yr yields were flat at 0.193pct but US 10yr yields rose by 9pts to 2.083pct.
The US dollar eased against the Euro and commodity currencies after major central banks moved to alleviate funding strains for European banks. The Euro rose from lows near US$1.3730 to around US$1.3930, before ending the US session near US$1.3885. The Aussie dollar rose from lows around US102.05c to US103.40c, ending the US trade near US103.15c. And the Japanese yen traded between 76.50 yen per US dollar and JPY77.05, before ending US trade near JPY76.65.
Global crude oil prices rose on Thursday as the latest news about a boost to European bank funding eased concerns about a slowing global economy. Nymex crude oil rose by US49c or 0.6pct to US$89.40 a barrel and London Brent crude rose by US$2.94 or 2.6pct to US$115.34 a barrel.
Base metal prices were higher on the London Metal Exchange supported by the latest plan to help European banks. Nickel led the gains rising 2pct with other metals up 0.7-1.8pct. And the gold price eased on Thursday with the Comex December gold price lower by US$45.10 an ounce or 2.5pct to US$1,781.40.
Ahead: In Australia, no economic data is released. In the US, the University of Michigan confidence are released.