Australian Stock Market Report – Morning 1/21/14

US MID SESSION MORNING REPORT
(6.50am AEDT)

European shares edged lower in thin trade on Monday. A surprising quarterly loss by Deutsche Bank prompted investors to cash in recent gains on banking stocks. Deutsche Bank fell by 5.4% after a drop in fixed income trading revenues restructuring costs, and also warning about a challenging 2014. Credit Suisse fell 2.5% and Commerzbank lost 4.5%. The STOXX 600 Banking index lost 1% but was still up 5.5% so far this year. The FTSEurofirst 300 index fell by 0.1% with the UK FTSE up by 0.1% and the German Dax lost 0.3%. Mining shares were higher in London trade with BHP Billiton shares down 0.2% while Rio Tinto fell by 1.4%.

US share markets were closed for the Martin Luther King Jr public holiday.

US treasury prices were closed for the Martin Luther King Jr public holiday.

The US dollar eased against major currencies on Monday. Higher short-term euro market interest rates saw the Euro holding near session highs. The Euro rose from lows near US$1.3525 to highs near US$1.3570 and was trading around US$1.3565 in morning trade. The Aussie dollar rose from lows near US87.70c to highs near US88.20c, and held near US87.95c in morning trade. And the Japanese yen traded between 104.25 yen per US dollar and JPY103.90 and was trading near 104.15 in late trade.

World oil prices were weaker on Monday weighed down by data showing China´s oil demand growth slowed further in 2013. Oil demand in China, the world´s second biggest oil consumer, rose just 1.6% last year, against forecast for IEA forecasts of 3.8% growth in China´s 2013 implied oil demand. In addition expectations of increased supply from the Middle East contributed to the selling pressure. Brent crude fell by US91c or 0.2% to US$106.29 a barrel while US Nymex crude fell by US65c or 0.7% to US$93.72 a barrel.

Base metal prices were weaker on the London Metal exchange on Monday. The subdued Chinese economic data prompted traders to trim positions, although tight near-term supply limited losses. Aluminium and Nickel were the worst performers, both losing 1%. And the gold futures price moved higher in electronic trade amid signs of improving investment flows. The Comex gold lifted by US$3.90 or 0.3% to US$1,255.80 per ounce. The iron ore price fell by US$2.50 to US$124.80 a tonne.

Ahead: In Australia and the US no economic data is released.

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