Australian Stock Market Report – Morning 2/11/14

US MORNING REPORT
(8am AEDT)

European shares were mixed on Monday. The new head of the US Federal Reserve, Janet Yellen, is to deliver her first testimony to the House of Representatives on Tuesday and the Senate on Thursday. The FTSEurofirst 300 index rose by 0.1% with the UK FTSE up by 0.3% while the German Dax was lower by 0.1%. Mining shares were also mixed in London trade with BHP Billiton shares up by 0.6% while Rio Tinto lost 0.7%.

US sharemarkets were little changed on Monday as investors awaited testimony from the new Federal Reserve chief on Tuesday. There was no economic data to drive sentiment. Thomson Reuters reports that earnings season moves into its latter stages, with 54 S&P 500 companies expected to report results this week. Of 344 companies in the benchmark S&P index that have reported earnings through Monday, 68% beat Wall Street expectations, Thomson Reuters data showed, against 67% over the past four quarters, and ahead of the 63% rate since 1994. At the close of trade, the US Dow Jones was up 8pts or 0.1% with the S&P 500 up 0.2% while the Nasdaq gained 22 points or 0.5%.

US long-term treasury prices rose slightly on Monday (yields lower) with traders largely sidelined, waiting for testimony from the Federal Reserve chief. US 2 year yields fell by 1 point to 0.311% while US 10 year yields fell by 2 points to 2.67%.

Major currencies were little changed against the greenback over the European and US sessions on Monday as traders awaited testimony from the new Fed chief. The Euro held between US$1.3620 and US$1.3650, and was near US$1.3645 in afternoon US trade. The Aussie dollar rose from lows near US89.05c to highs near US89.50c, and was near US89.45c in afternoon US trade. And the Japanese yen lifted from 102.46 yen per US dollar to JPY102.00 and was trading near JPY102.20 in afternoon US trade.

World oil prices were mixed on Monday. There were disruptions to ship traffic in the Panama Canal due to construction delays. Data showed a lift in Libyan oil exports. But harsh winter weather was again set to hit the US north east, boosting heating oil demand. And output at Britain´s Buzzard oilfield returned to a normal rate after outages last week. Brent crude fell by US94c or 0.9% to US$108.63 a barrel while US Nymex crude rose by US18c or 0.2% to US$100.06 a barrel.

Base metal prices generally fell up to 1.2% on the London Metal Exchange on Monday with zinc leading the declines. But nickel rose 0.5% with tin up 0.1%. The gold price rose on Monday with the Comex gold futures up by US$11.80 or 0.9% to US$1,274.70 per ounce. The iron ore price fell by 10c on Monday to US$120.80 a tonne.

Ahead: In Australia the weekly Roy Morgan consumer sentiment index is released with the NAB business survey, housing finance and the ABS residential property price indexes. In the US, Federal Reserve chair, Janet Yellen, gives testimony. Wholesale sales and inventories data are expected with weekly chain store sales figures.

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