Australian Stock Market Report – Morning 12/6/13

US MORNING REPORT
(8.00am AEDT)

In US economic news, weekly jobless claims (claims for unemployment insurance) fell by 23,000 to 298,000. The US economy grew at 3.6pct annual pace in the September quarter, up from the ´´flash´´ estimate of 2.8%. Factory orders fell by 0.9pct in October, close to forecasts. And according to Challenger, planned job layoffs fell from 45,730 to 45,314 in November.

The European Central Bank and Bank of England both left their policy rates unchanged. ECB staff forecast inflation to average just 1.1% in 2014, below the target of 2%.

European shares fell again on Thursday on ongoing concerns about when the US Federal Reserve will start to taper (wind back stimulus). The FTSEurofirst 300 index fell by 1.0%, the German Dax fell by 0.6% and the UK FTSE lost 0.2%. Italian and Spanish banking stocks recorded larger falls of 2-3%. But miners were mixed. In UK trade, shares in BHP Billiton fell by 0.2% while Rio Tinto gained 0.2%.

US sharemarkets eased again on Thursday. Investors weighed latest economic data and remained wary of taking new positions ahead of the monthly job report. Shares in Microsoft fell 2.4%, balancing a 0.5% lift in Apple shares. At the close of trade, the Dow Jones was down by 68pts or 0.4%, while the S&P 500 was down 0.4% and the Nasdaq lost 4.8pts or 0.1%.

US long-dated treasuries fell slightly (yields higher) on Thursday as traders positioned ahead of the monthly job report. US 2yr yields were up less than 1 point to 0.30pct and US 10yr yields rose by 3pts to 2.866pct.

The US dollar eased against major currencies in US trade on Thursday. The Euro rose from lows near US$1.3545 to around US$1.3675, and was trading near US$1.3665 in afternoon US trade. The Aussie dollar rose from lows near US90.00c to around US90.75c, and was near US90.65c in afternoon US trade. And the Japanese yen rose from 102.28 yen per US dollar to JPY101.66 and was around JPY101.70 in afternoon US trade.

World oil prices were mixed again on Thursday. US crude rose on the view that solid economic data translates to stronger oil demand. Crude inventories also fell in the latest week. Brent fell as traders unwound some of the spread with the Nymex price. Brent crude fell by US90c or 0.8% to US$110.98 a barrel while US Nymex crude rose by US18c or 0.2% to US$97.38 a barrel.

Base metal prices were mixed on the London Metal Exchange on Thursday but gains or losses didn´t exceed 0.8%. The gold futures price fell despite a weaker US dollar with the Comex February futures gold price down by US$15.30 or 1.2% to US$1,231.90 per ounce. And the iron ore price fell by US20c or 0.1% to US$139.50 a tonne.

Ahead: In Australia, no major economic data is due. Shares in Nine Entertainment will list on the Australian Stock Exchange. In the US, non-farm payrolls (employment) data is due together with personal spending and consumer sentiment.

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