Australian Stock Market Report - Morning 01/13/2012
US retail sales increased by 0.1pct in December after rising by an upwardly revised 0.4pct in November. US jobless claims rose by 24,000 to 399,000 in the first week of 2012 - a six week high. US business inventories rose 0.3pct in November.
The ECB left interest rates unchanged as expected at the first meeting of 2012. The decision was unanimous. The ECB sited that it sees “tentative signs of stabilisation” in the economy however the outlook was subject to “high uncertainty”, with “substantial downside risks”. Inflation risks were “broadly balanced”.
European shares gave back early gains after a profit warning from retail giant Tesco. Tesco fell 16.2pct while the European retail index was the top decliner losing 5.7pct. Earlier in the day successful Spanish and Italian debt auctions supported market sentiment. Spain raised €10 billion, from three bond auctions, doubling its target with yields falling about 1 percentage point. Similarly Italy sold €8.5 billion of 12-month bills at a yield of 2.735pct compared with nearly 6pct at its mid-December auction. The STOXX European banking index rose 1.1pct. The FTSEurofirst index fell by 0.3pct with the UK FTSE down 0.2pct and German Dax eased by 0.4pct.
US sharemarkets were modestly higher on Thursday. However energy stocks were under pressure after a profit warning from Chevron (down 2.4pct). The S&P energy sector was the biggest decliner falling 0.8pct. At the close of trade the Dow Jones was higher by 22 points or 0.2pct with the S&P 500 up 0.2pct while the Nasdaq was up 14pts or 0.5pct.
US long-dated treasuries fell on Thursday (yields higher) following a weak 30-year bond auction. US treasury sold $13 billion in 30yr bonds at a yield of 2.985pct. US 2yr yields were flat at 0.233pct and US 10yr yields rose by 1pt to 1.923pct.
The Euro and commodity currencies rallied against the greenback in overnight trade, supported by the strong debt auctions in Europe. The Euro rose from near $1.2705 to US$1.2845 and was near US$1.2830 in late US trade. The Aussie dollar rose from US102.85c to US103.75c, and was around US103.40c in late US trade. And the Japanese yen held between 76.95 yen per US dollar and JPY76.65, and was near JPY76.75 in late US trade.
World crude oil prices fell on Thursday on after reports that the European embargo on Iranian crude could be delayed by 6-months. Nymex crude oil fell by US$1.38 or 1.4pct to US$99.49 a barrel and London Brent crude fell by US98c to US$111.26 a barrel.
Base metals were mostly higher on Thursday, with the exception of Aluminium which fell 0.2pct. And the gold price rose for the third day following the weakness in the US dollar. The Comex February gold price rose by US$8.10 or 0.5pct to US$1,647.70 an ounce.
Ahead: In Australia, no economic data is released. In the US, trade data and the University of Michigan consumer confidence figures are released.