Australian Stock Market Report – Morning 11/13/13

MORNING MARKET UPDATE
(8.00am AEDT)

In US economic news, chain store sales rose by 3.3pct in the past week compared with a year ago according to Redbook Research, down from 3.8pct in the previous week. The Chicago Federal Reserve national activity index rose from 0.13 to 0.14 in September. But the employment trends index eased from 114.8 to 113.65 in October.

The Plenum meeting of the Chinese leadership has unveiled a reform agenda for the next decade. Leaders say they are focused on ´´allowing the market to play a decisive role in allocating resources and improving the government´s role.´´

European shares eased modestly on Tuesday in response to weak corporate earnings results. Shares in German chip maker Infineon fell by 5.6pct after the company flagged lower revenue in the current quarter. The FTSEurofirst 300 index fell by 0.6pct, the UK FTSE lost 1.6 points or less than 0.1pct and the German Dax
lost 0.3pct. In UK trade, shares in BHP Billiton fell by 0.8pct while Rio Tinto eased 0.2pct.

US sharemarkets eased modestly in light trade on Tuesday. At the close of trade, the Dow Jones was down by 32 points or 0.2pct with the S&P 500 down by 0.2pct and the Nasdaq was up by 1.6pts or less than 0.1pct.

US treasuries fell on Tuesday (yields higher) as investors prepared for new bond supply. On Tuesday Federal Treasury auctioned $30 billion in three-year notes and will sell $24 billion in 10-year notes on Wednesday and $16 billion of 30-year bonds on Thursday.

US 2yr yields rose by 1pt to 0.33pct and US 10yr yields
rose by 3pts to 2.77pct.

Major currencies were mixed against the greenback in European and US trade on Tuesday. The Euro rose from lows near US$1.3360 to around US$1.3455, and was near US$1.3435 in afternoon US trade. The Aussie dollar fell from highs near US93.35c to US92.80c, and was holding near US92.95c in afternoon US trade. And the Japanese yen held between 99.43 yen per US dollar and JPY99.78, and was holding near JPY99.68 in afternoon US trade.

World oil prices fell on Tuesday. The International Energy Agency expects the US to be the world´s largest oil exporter by 2015. The Brent crude price fell by US59c or 0.6pct to US$105.81 a barrel, US Nymex crude fell by US$2.10 or 2.2pct to US$93.04 a barrel.

Base metal prices fell up to 1.0pct on the London Metal
Exchange on Tuesday with lead and tin down the most. Gold fell again on Tuesday after comments by Federal Reserve officials showed the US central bank was getting closer to winding back stimulus. The Comex December futures gold price was down by US$9.90 or 0.8pct to US$1,271.20 per ounce. The iron ore price
was unchanged at US$135.90 a tonne.

Ahead: In Australia, the wage price index, car sales and consumer confidence data are released. In the US, the weekly mortgage market index and monthly Federal Budget data are released.

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