Australian Stock Market Report - Morning

US ISCS chain store sales rose by 1.7pct in the week to December 18 compared with the prior week. ICSC research expects same-store sales to rise 3.0-3.5pct for December.

European shares closed at fresh 27-month highs on Tuesday. Mining shares were boosted by strong metals prices. The copper price hit record highs supporting producers like Xstrata which gained 3.5pct. However volumes were light and some concerns over the euro zone debt crisis lingered after ratings agency Moody´s said it was reviewing Portugal´s credit rating. The FTSEurofirst index rose by 0.7pct, with the UK FTSE rose 1.0pct and the German Dax was higher by 0.9pct.

US sharemarkets rallied on Tuesday, with major indices breaking through key technical resistance levels. Upbeat earnings results buoyed sentiment. Coal miner, Massey Energy rose 1.3pct after a report in the Wall St Journal that rival Alpha Natural Resources has offered to buy it. Financials led the way higher with the KBW banking index jumping 1.7pct. At the close of trade, the Dow Jones was higher by 55pts or 0.5pct with the S&P 500 up 0.6pct and the Nasdaq stronger by 18pts or 0.7pct.

US treasuries were largely unchanged on Tuesday. Buying momentum faded after the Federal Reserve purchased $7.8 billion in treasuries. US 2yr yields were unchanged at 0.61pct while US 10yr yields fell 2pts to 3.32pct.

The US dollar rallied against the Euro following concerns that further ratings downgrades are likely to take place amongst Euro member nations. The Euro fell from highs near US$1.3195 to US$1.3075, ending US trade near US$1.3090. The Aussie dollar rallied from lows near US99.45c to US99.90, and was near US99.70c in late US trade. And the Japanese yen traded between 83.50 yen per US dollar and JPY83.90, and was around JPY83.70 in late US trade.

US crude oil prices rose on Tuesday on the back off a surge in gasoline futures, which rallied to six-month highs. The cold weather in Europe and the US provided a degree of support. The Nymex crude oil contract rose by US45 cents or 0.5pct to US$89.82 a barrel.

Base metal prices were mostly higher on the London Metal Exchange. Aluminium and Copper led the gains, rising 2.5pct and 1.8pct respectively. The copper price rose to record highs on supply concerns and increasing demand. The laggard was Lead which eased by 0.1pct. The gold price recorded modest gains in line with the rest of the commodities complex. Comex gold futures added US$2.70 an ounce to US$1,388.80.

Ahead: In Australia no economic data is released. In the US GDP and existing home sales are released.