Australian Stock Market Report – Morning 2/18/14

US MORNING REPORT
(6am AEDT)

European shares were mixed on Monday in thin trade with volumes affected by holidays in North America. The FTSEurofirst 300 index rose by 0.4% with the UK FTSE up by 1.1% but the German Dax lost 0.1%. Mining shares were stronger in response to strong Chinese lending data and in London trade shares in both BHP Billiton and Rio Tinto rose by 1.2%.

US sharemarkets were closed for the Presidents Day holiday. Last week both the Dow Jones and S&P 500 rose by 2.3% while the Nasdaq rose by 2.9%.

In terms of US treasury prices, 2 year yields fell by 1 point on Friday to 0.315% while US 10 year yields rose by 1 point to 2.74%. Over the week US 2 year yields rose by around 1 point and US 10 year yields rose by 8 points.

Major currencies were mixed in thin, holiday-affected trade over the European and US sessions on Monday. The Euro held between US$1.3690 and US$1.3720 and was near US$1.3700 in afternoon US trade. The Aussie dollar fell from highs near US90.55c to lows near US90.20c, and was at US90.30c in afternoon US trade. And the Japanese yen eased from near 101.55 yen per US dollar to JPY101.96 and was trading near JPY101.90 in afternoon US trade.

World oil prices rose on Friday. Investors remain focussed on winter snowstorms on the US east coast, boosting heating oil demand. Reuters also notes ´´Supply disruption fears continued to keep a floor under prices. Libya´s oil production has dropped to 390,000 barrels per day (bpd) as protests have partly blocked flows from the El Sharara oilfield, the state National Oil Corp said.´´ Brent crude rose by US8c to US$109.16 a barrel while US Nymex crude rose by US62c to US$100.92 a barrel.

Base metal prices rose up to 1.0% on the London Metal Exchange on Monday with zinc leading the way. The exception was aluminium, down 0.8%. The gold price rose again, supported by physical demand in China and India, with the Comex futures price up in after-hours trade by US$10.50 or 0.8% to US$1,329.10 per ounce. The iron ore price rose by US$1.20 on Monday to US$124.40 a tonne.

Ahead: In Australia data on imports is released while the Reserve Bank issues minutes of the last Board meeting. BHP Billiton is amongst those to issue earnings. In the US, the New York Federal Reserve manufacturing survey is released together with capital flows data and the NAHB housing market index.

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