Australian Stock Market Report - Morning 04/13/2011
The US trade deficit narrowed by 2.6pct to $45.8 billion in February. US imports fell by 1.7pct in February, while exports fell by 1.4pct. US Import prices rose by a larger than expected 2.7pct in March - the sixth straight monthly increase. The rise in import prices reflected a 10.5pct surge in the price of petroleum. The US government posted a monthly deficit of $188 billion in March.
European shares suffered their biggest one-day fall in a month on Tuesday. The severity of the Japanese nuclear crisis added to the negative investor sentiment. Mining and energy stocks were amongst the biggest losers with Xstrata down 4.2pct, and Total losing 2.6pct. The FTSEurofirst index fell by 1.7pct, the German Dax lost 1.4pct and the UK FTSE fell by 1.5pct.
US sharemarkets fell sharply on Tuesday, as the weaker than expected Alcoa revenue result disappointed investors. Alcoa fell 6pct and was the biggest percentage loser on the Dow Jones. Energy stocks led the weakness, following the slide in the oil price. The S&P Energy index lost 3pct. The Dow Jones index fell by 118pts or 1pct, with the S&P 500 lower by 0.8pct and the Nasdaq lost 27pts or 1pct.
US treasuries rallied on Tuesday (yields lower). Treasuries were boosted by a safe-haven bid after Japan raised the severity level of the nuclear crisis. US 2yr yields fell by 9pts to 0.75pct and US 10yr yields lost 11pts to 3.49pct.
The US dollar fell to a 15-month low against the Euro on Tuesday. Reports that China was committed to buying Spanish debt boosted the Euro. The Euro rose from lows near US$1.4380 to highs US$1.4515, ending US trade at US$1.4475. The Aussie dollar rose from lows near US104.20c to around US105.15c, ending near US104.45c. And the Japanese yen trade rallied from lows around 84.40 yen per US dollar to highs near JPY83.55, closing US trade near its highs.
US crude oil prices fell on Tuesday as US investment banks warned of the possibility of a price reversal. Fear that higher oil prices could erode demand also added to the selling pressure. The Nymex crude oil contract fell by US$3.67 or 3.3pct to US$106.25 a barrel. The London Brent crude fell by US$3.06 to US$120.92 a barrel.
Base metal prices were sharply weaker on the London Metal Exchange on Tuesday. Fears that the Japanese nuclear crisis could stall the global recovery drove the weakness in commodities. Lead lost 4.9pct while other metals gave back between 1.1-3.7pct. And the Gold price followed oil lower recording its biggest one-day drop in a month. The Comex gold futures price fell by US$14.50 an ounce to US$1,453.60.
Ahead: In Australia, consumer sentiment is released. In the US, Business inventories , the Fed beige book and retail sales are released. The RBA Governor delivers a speech in New York.
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