Australian stock market report - Morning 16/2/2011
US retail sales rose 0.3pct in January with non-auto sales also up 0.3pct. Economists had tipped a 0.6pct lift in sales and 0.5pct increase in non-auto sales. US import prices rose 1.5pct in January with export prices up 1.2pct. Both results were around double market expectations. And US business inventories rose 0.8pct in December to 2-year highs with sales up 1.1pct.
European shares were mixed on Tuesday but the broader FTSEurofirst index still managed to lift 0.2pct to fresh 29-month highs. The UK FTSE fell by 0.4pct despite a 5.8pct lift in shares of Barclays in response to earnings results. But mining shares fell with BHP Billiton down 2.2pct and Rio Tinto down 2.8pct in London trade. The German Dax was higher by 0.1pct and the French CAC40 rose 0.3pct.
US sharemarkets weakened on Tuesday. Investors were disappointed by softer-than-expected retail sales data. And demonstrations in Iran added to market jitters. NYSE Euronext and Deutsche Boerse have agreed on a US$10.2 billion merger to create the world´s largest exchange operator. Energy shares fell in line with a lower oil price. Exxon Mobil fell 2.5pct. At the close of trade, the Dow Jones index was down almost 42pts or 0.3pct with the S&P 500 lower by 0.3pct and the Nasdaq eased 13pts or 0.5pct.
US treasuries were firmer on Tuesday (yields lower). While stocks fell and retail sales fell short of forecasts this was balanced against upbeat comments from Treasury Secretary Geithner. US 2yr yields eased 3pts to 0.82pct and US 10yr yields fell 2pts to 3.60pct.
The US dollar was generally firmer against major currencies in European and US trade. The Euro traded between US$1.3460 and US$1.3550 and was near US$1.3480 in late US trade. The Aussie dollar eased from highs around US100.50c to US99.40c, and was near US99.55c in late US trade. And the Japanese yen eased from 83.40 yen per US dollar to around JPY83.90, and was around JPY83.80 in late US trade.
US crude oil prices fell again on Tuesday. Investors were concerned by soft US consumer spending data and also fretted that China may have to tighten policy markedly in response to high inflation. The Nymex crude oil contract fell by US49c or 0.6pct to US$84.20 a barrel. London Brent crude fell by US$1.44 to US$101.64 a barrel.
Base metal prices eased on the London Metal Exchange on Tuesday as investors worried that China may have to deal more aggressively with high inflation. Cash metal prices were down from 0.2-1.5pct with copper falling most. But the gold price rose on stronger demand for safe-haven assets with the Comex gold futures price up by US$9.00 an ounce to US$1,374.10.
Ahead: In Australia, car sales data is issued today. BHP Billiton, CSL and Westfield are amongst those ro release results. In the US, housing starts, producer prices and industrial production data is scheduled.
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