Australian Stock Market Report 6/29/2011
According to the Case-Shiller series, US home prices fell 0.1pct in seasonally adjusted terms to be down 4.0pct lower than a year ago. Prices rose by 0.7pct in unadjusted terms. US consumer confidence eased from 61.7 to 58.5 in June, below forecasts centred on 60.5. US chain store sales were up 2.5pct in the latest week on a year ago and June sales to date were up 3.5pct. And the Richmond Fed index improved from -6 to +3 in June.
French finance minister Christine Lagarde will take over as managing director of the International Monetary fund on July 5.
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European shares rose again on Tuesday on optimism that the Greek parliament will vote to approve new austerity measures. The Greek banking index rose 4.7pct. In London trade shares in BHP Billiton rose by 1.3pct with Rio Tinto up 1.6pct. The FTSEurofirst index rose by 0.6pct with the German Dax higher by 0.6pct and the UK FTSE up by 0.8pct.
US sharemarkets posted solid gains on Tuesday on hopes that Greece will avoid default. Investors also sought to put cash to work ahead of month and quarter end. The Vix or ´´fear gauge´´ fell by 6.1pct. The Dow Jones rose by 145pts or 1.2pct with the S&P 500 up 1.3pct and the Nasdaq lifted 41pts or 1.5pct.
US treasuries fell again on Tuesday (yields higher) as investors sought to put cash and fixed-interest assets to work in the sharemarket ahead of month-end and quarter-end. US 2yr yields rose by 8pts to 0.485pct and US 10yr yields rose by 11pts to 3.04pct.
The Euro and commodity currencies rose against the US dollar in European and US trade on Tuesday while other safe-haven currencies like the Japanese yen also eased. The Euro rose from lows near US$1.4240 to US$1.4395, before ending US trade near US$1.4365. The Aussie dollar rose from near US104.30c to US105.45c, ending US trade near the session highs. And the Japanese yen weakened from 80.65 yen per US dollar to JPY81.25, before ending US trade around JPY81.10.
Benchmark crude oil prices rose on Tuesday in response to a weaker greenback and buoyed by investor interest in riskier assets such as equities and commodities. US Nymex crude oil rose by US$2.28 or 2.5pct to US$92.89 a barrel but London Brent crude rose by US$2.79 to US$108.78 a barrel.
Base metal prices posted modest gains on the London Metal Exchange on Tuesday in response to a weaker greenback. Metals rose 0.4-2.2pct with nickel doing best. And the gold price rose in line with other commodities with Comex gold higher by US$3.80 an ounce or 0.3pct to US$1,500.20.
Ahead: In Australia, no major economic data is scheduled. In the US, the pending homes sales index is released.
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