Australian Stock Market Report – Morning 11/5/13

US MORNING REPORT
(8.05am AEDT)

In US economic news, factory orders rose by 1.7pct in September, in line with forecasts. Durable goods orders were revised to show a 3.8pct increase in September or a decline of 1.3pct if defence orders and aircraft are excluded.

European shares rose to five-year highs on Monday on expectations that the European Central Bank will adopt an accommodative stance at its meeting on Thursday. In addition data showed the Eurozone purchasing managers index manufacturing output index rose from 52.2 to 52.9 in October. The FTSEurofirst 300 index rose by 0.3pct while the German Dax also rose by 0.3pct, and the UK FTSE lifted by 0.4pct. Mining shares rose in London trade with BHP Billiton up by 1.6pct while Rio Tinto shares rose by 3.3pct.

US sharemarkets rose modestly in quiet trading. Most investors are focussed on key economic data to be released later in the week. Shares in Blackberry plunged 16.4pct after abandoning plans to put the business up for sale. Thomson Reuters noted: ´´With about 75pct of S&P 500 companies having reported results so far, 69pct have topped Wall Street´s expectations, above the long-term average of 63pct. Just 53pct have topped revenue forecasts, below the 61pct average since 2002.´´ At the close of trade, the Dow Jones was up by almost 24 points or 0.2pct with the S&P 500 up by 0.4pct while the Nasdaq rose by 14.5pts or 0.4pct.

US longer-term treasury yields rose on Monday (yields lower), reversing some of the losses recorded on Friday as traders awaited economic growth and employment data later in the week. US 2yr yields fell by 2pts to 0.305pct and US 10yr yields were down by 3pts to 2.60pct.

The US dollar eased against major currencies in European and US trade on Monday. The Euro rose from lows near US$1.3480 to around US$1.3525 and was near US$1.3515 in late US trade. The Aussie dollar lifted from near US94.75c to around US95.10c and was near US95.05c in afternoon US trade. And the Japanese yen held between 98.51 yen per US dollar and JPY98.75, holding near JPY98.61 in afternoon US trade.

World oil prices rose modestly on Monday as the US dollar gave back some of Friday´s gains. As oil is priced in US dollars, a weaker greenback improves the purchasing power of buyers in Europe and Asia. Brent crude rose by US32c or 0.3pct to US$106.23 a barrel. Nymex rose by US1c to US$94.62 a barrel.

Base metal prices fell up to 1.4pct on the London Metal Exchange on Monday with lead, copper and nickel all down the most while tin lost just 0.4pct. But gold rose modestly as the US dollar eased against major currencies with the Comex December futures gold price up by US$1.50 or 0.1pct to US$1,314.70 per ounce. The iron ore price lifted by US50c a tonne or 0.4pct on Monday to US$135.80 a tonne

Ahead: In Australia, the Reserve Bank Board meets. The Performance of Services index is released. The Melbourne Cup is run. In the US, weekly chain store sales data is expected together with the ISM services gauge.

[Kick off your trading day with our newsletter]