Australian Stock Market Report – Morning 2/26/14

US MORNING REPORT
(8am AEDT)

In US economic data, the S&P/Case Shiller home price index rose by 0.8% in December to be up 13.4% on a year ago. The FHFA home price index was up by 7.7% on a year ago. Consumer confidence eased from 79.4 to 78.1, short of forecasts centred around 80.0. And the Richmond Fed composite index eased from +12 to minus 6 in February.

European shares closed mixed on Tuesday in response to corporate earnings results. The FTSEurofirst 300 index was unchanged with the UK FTSE down by 0.5% and the German Dax lost 0.1%. Mining shares were sharply weaker in London trade with BHP Billiton down 1.6% while Rio Tinto lost 2.8%. Traders cited concerns about the outlook for the Chinese economy.

US sharemarkets eased modestly in quiet trade on Tuesday. Economic data was mixed but retail stocks rose after reporting earnings results. Shares in Home Depot rose by 4.0% and shares in Macy´s rose by 6.0%. At the close of trade, the US Dow Jones was down by 27 points or 0.2%, trading in a 107 point range over the session. The S&P 500 was down by 0.1% and the Nasdaq eased by 5 points or 0.1%.

US long-term treasury prices rose on Tuesday (yields lower). Economic data was again mixed while traders awaited testimony by the Federal Reserve chief Janet Yellen to the Senate Banking Committee. The report had been delayed after snowstorms closed Government businesses on February 13. US 2 year yields fell 2 points to 0.314% while US 10 year yields fell by 4 points to 2.70%.

Major currencies range-traded against the greenback over the European and US sessions. The Euro held between US$1.3715 and US$1.3765 and was near US$1.3740 in afternoon US trade. The Aussie dollar rose from lows near US90.00c to highs near US90.40c, and was around US90.15c in afternoon US trade. And the Japanese yen lifted from levels near 102.53 yen per US dollar to JPY102.02 and was trading near JPY102.15 in afternoon US trade.

World oil prices eased on Tuesday. Traders expect that US crude stockpiles are building while demand for diesel is expected to ease in response to milder weather in the US Northeast. Brent crude fell by US$1.13 or 1.0% to US$109.51 a barrel while US Nymex crude fell by US99c or 1.0% to US$101.83 a barrel.

Base metal prices rose or fell on the London Metal Exchange by up to 0.6% on Tuesday. Lead fell 0.6% but zinc rose 0.6%. The gold price rose again on Tuesday with traders citing softer US consumer confidence data. The Comex gold futures price rose by US$4.70 or 0.4% to US$1,342.70 per ounce. The iron ore price fell by US80c on Tuesday to US$119.10 a tonne.

Ahead: In Australia construction work done figures are scheduled. In the US, new home sales and weekly mortgage applications data are released.

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