Australian Stock Market Report – Morning 11/7/13

US MORNING REPORT
(8.00am AEDT)

In US economic news, the leading index rose by 0.7pct in September, just above forecasts. Planned layoffs by companies lifted by 40,289 to 45,730 in October according to Challenger. And the mortgage market index fell by 7pct in the latest week with purchases down 5.2pct and refinancing down 7.9pct.

The global composite purchasing managers index, a good guide to global economic growth, lifted from 53.6 to 55.5 in October according to JP Morgan.

European shares lifted to 5-year highs in Wednesday´s session in response to better-than-expected corporate earnings figures. The FTSEurofirst 300 index rose by 0.4pct but while the German Dax rose by 0.4pct, the UK FTSE lost 0.1pct. Mining shares were mixed in London trade with BHP Billiton up by 0.7pct while Rio Tinto shares lost 0.2pct.

US blue chip shares rose sharply at the open of trade and held onto the gains. At the close, the Dow Jones was higher by 128 points or 0.8pct after being up 132 points in late trade. The S&P 500 was up by 0.4pct but the Nasdaq was lower by 8pts or 0.2pct.

US longer-term treasuries rose on Wednesday (yields lower), as traders positioned ahead of economic growth and employment data. US Treasury released details of its quarterly refunding. Next week it will sell $30 billion in three-year notes, $24 billion in 10-year notes, and $16 billion for 30-year bonds. US 2yr yields fell by 2pts on Wednesday to 0.294pct and US 10yr yields fell by 3pts to 2.64pct.

Major currencies drifted higher against the greenback in European and US trade on Wednesday. The Euro rose from US$1.3490 to around US$1.3545 and was near US$1.3520 in afternoon US trade. The Aussie dollar held between US95.05c and US95.45c and was near US95.30c in afternoon US trade. And the Japanese yen held between 98.47 yen per US dollar and JPY98.72, and was holding near JPY98.67 in afternoon US trade.

The US oil price rose on Wednesday after data showed a surprising drop in US gasoline inventories in the latest week. While Brent crude fell by US9c or 0.1pct to US$105.24 a barrel, US Nymex crude rose by US$1.43 or 1.5pct to US$94.80 a barrel.

Base metal prices were mixed on the London Metal Exchange on Wednesday. Aluminium and lead rose by 0.2pct but other metals fell up to 1.6pct with nickel down the most. Gold rose on Wednesday as the greenback eased slightly with the Comex December futures gold price up by US$9.70 or 0.7pct to US$1,317.80 per ounce. The iron ore price lifted again on Wednesday, rising by US30c a tonne or 0.2pct to US$137.10 a tonne

Ahead: In Australia, employment and unemployment data is released. In the US, September quarter economic growth data is released together with weekly data on claims for unemployment insurance and consumer credit figures. Twitter lists on the New York Stock Exchange. The European Central Bank and Bank of England hand down monetary policy decisions.

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