Australian Stock Market Report - Morning 14/01/2011
US Federal Reserve Chairman Ben Bernanke anticipates that the US economy should grow in the 3-4pct range over 2011, however growth of this magnitude is ´´not going to reduce unemployment at the pace´´ he would like to see. Bernanke did admit that the economy is looking better over the past few months.
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US jobless claims rose unexpectedly by 35,000 to 445,000 in the past week. The four week moving average of claims - a better indication of underlying trends - rose by a more modest 5,500 t0 416,500 in the past week. The final read on the Philadelphia Fed factory activity survey was revised modestly lower from 24.3 to 20.8 in December.
US producer prices rose by a larger than expected 1.1pct in December after the 0.8pct lift in November. Core producer prices rose by a more sedate 0.2pct. The US trade gap narrowed from $38.4 billion to $38.3 billion in November.
European shares fell on Thursday on concern that Euro zone inflation pressures could spark a rate rise. The FTSEurofirst index fell by 0.6pct, with the UK FTSE fell by 0.4pct while the German Dax rose by 0.1pct.
US sharemarkets eased on Thursday following the rise in jobless claims. At the close of trade, the Dow Jones index was lower by 23pts or 0.2pct with the S&P 500 down 0.2pct and the Nasdaq lower by 2pts or 0.1pct.
US treasuries rose on Thursday (yield lower). However lacklustre demand for the $13 billion auction in US 30-year bonds reduced early gains. US 2yr yields fell 3pts to 0.58pct and US 10yr yields lost by 8pts to 3.30pct.
The Euro surged against the US dollar after solid European debt auctions and speculation that the ECB could raise interest rates. The Euro rose from lows near US$1.3090 to US$1.3380, and was heading into the US close near US$1.3350. The Aussie dollar lifted from lows around US99.30C to US1.0015c, and was near US99.65c in late US trade. And the Japanese yen rose from lows near 83.10 yen per US dollar to JPY82.55, and was around JPY82.75 in late US trade.
US crude oil prices fell on Thursday in response to the disappointing jobs data and a possibility that OPEC may look at raising output. The Nymex crude oil contract fell by US46c or 0.5pct to US$91.40 a barrel.
Base metal prices were weaker on the London Metal Exchange on concerns that demand may wane in China ahead of the Chinese Ney Year in early February. Metals lost between 0.6-0.9pct. And the gold price reversed losses in late trade with the Comex gold futures price higher by US$1.20 an ounce to US$1,387.00.
Ahead: In Australia, no economic data is released. In the US, data on inflation, business inventories, retail sales and industrial production are released.
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