MORNING REPORT
(7am AEDT - Due to the change in daylight saving hours in the US - Wall street now closes at 7am AEDT)

US housing starts fell 1.1pct to a seasonally adjusted rate of 698,000 units in February. However January starts were revised modestly higher. Building permits which lead starts, ticked up to 717k, suggesting that the fall in starts was just a temporary dip. The underlying trend is of very gradual improvement.

European shares fell from eight-month highs on Tuesday, as concerns over materials demand in top consumer China hurt cyclical stocks. Miners accounted for a large part of the decline. In London BHP fell 4pct while Rio Tinto lost 4.1pct.The benchmark FTSEurofirst 300 index fell by 1.1pct with the German Dax down 1.4pct while the UK FTSE suffered its sharpest fall in two-weeks losing 1.2pct.

US sharemarkets fell from near 4-year highs on Tuesday. The weakness was driven by news that China raised fuel prices for the second time in less than six weeks raising concerns that China´s economy may slow at a faster pace than previously thought. The weaker US economic data gave investors a further reason to take stock of the recent rally. However shares in Tiffany and Co jumped 6.8pct after the jewellery maker forecast higher sales dues to the expansion in Asia and the Americas. At the close of trade, the Dow Jones was lower by 69pts or 0.5pct with the S&P 500 down by 0.3pct while the Nasdaq lost 4pts or 0.1pct.

US long-term treasuries recorded modest gains on Tuesday (yields lower) as investors switched away from ´´riskier´´ assets such as commodities to government bonds. US 2yr yields were flat at 0.40pct and US 10yr yields fell by 2pts to 2.36pct.

The Euro and commodity currencies fell against the greenback in overnight trade as Chinese growth concerns boosted safe-haven demand. The Euro hit early lows near US$1.3175 before bouncing back to highs around to US$1.3245, eased in late trade to near US$1.3215. The Aussie dollar fell from highs around US105.80c to US104.55c and was near US104.75c in late US trade. And the Japanese yen traded between 83.80 yen per US dollar to JPY83.35 and was near JPY83.75 in late US trade.

Benchmark crude oil prices eased on Tuesday after Saudi Arabia´s oil minister said the OPEC nation was prepared to meet any supply shortfalls. Saudi Arabia was currently pumping 9.9 million barrels per day but was willing to increase production to 12.5 million barrels if needed. US Nymex crude fell by US$2.48 or 2.3pct to US$105.61 a barrel and London Brent crude fell by US$1.59 to US$124.12 a barrel.

Base metal prices were mostly weaker on Tuesday, falling by up to 4.3pct. Concerns about the scale of China´s economic slowdown drove the weakness. Further fuelling the weakness was news that BHP was seeing signs of ´´flattening´´ iron ore demand from China. And the gold price fell on Tuesday with the April Comex gold price down by US$20.30 or 1.2pct to US$1,647 an ounce.

Ahead: In Australia, no economic data is released. In the US, data on existing home sales is released.