Australian Stock Market Report – Morning 3-8-13

US MORNING REPORT
(8am AEDT)

New claims for unemployment insurance in the US (jobless claims) fell by 7,000 to 340,000 in the latest week. Planned job cuts by US companies lifted to 55,356 workers in February, up 7pct on a year ago according to the Challenger survey. The trade deficit widened from $38.14 billion to $44.45bn in January, above forecasts centred on a result near $42.6bn.

Exports fell 1.2pct while imports rose by 1.8pct. US productivity fell at a 1.9pct annual rate in the December quarter, the biggest annual decline in four years. And US household debt grew at the fastest rate in five years in the December quarter.

The European Central Bank left the key refi rate at 0.75pct as expected. And the Bank of England kept the bank rate at 0.5pct and decided against its further purchases of government bonds.

European shares were mixed on Thursday. A 12.5pct drop in shares of UK insurer Aviva weighed on the benchmark FTSEurofirst 300 index but resources stocks rose on positive US economic data. The FTSEurofirst 300 index fell by 0.1pct but the UK FTSE index lifted by 0.2pct while the German Dax gained 0.3pct. Mining stocks were also stronger with shares in Rio Tinto up by 2.4pct in London trade while shares in BHP Billiton rose by 0.8pct.

US sharemarkets rose again on Thursday, encouraged by latest jobless claims data. But investors were cautious ahead of Friday´s employment (payrolls) data. At the close, the Dow Jones was up by 33pts or 0.23pct with the S&P 500 index up by 3pcts and the Nasdaq was up 10pts or 0.3pct.

US long-term treasuries fell again on Thursday (yields higher) with investors continuing to drift to equities and commodities in preference to safe-haven assets like government bonds. US 2yr yields were steady near 0.25pct while US 10yr yields rose by 5pts to 1.99pct.

The Euro and commodity currencies rose against the US dollar in European and US trade on Tuesday. The Euro rose from near US$1.2980 to US$1.3115 and was near the highs in afternoon US trade. The Aussie dollar drifted higher from near US102.35c to around US102.85c and was at US102.70c in the afternoon US session. But the Japanese yen eased from 93.85 yen per US dollar to JPY95.05, and was trading near JPY94.92 in afternoon US trade.

World crude oil prices were mixed on Thursday. While US data encouraged investors, Brent crude was pressured by the restart of the Brent pipeline in the North Sea. Brent fell by US10c to US$110.96 but the US Nymex crude price lifted by US$1.13 to US$91.56 a barrel.

Base metal prices rose up to 1.4pct on the London Metals Exchange on Thursday. The gold price rose modestly with the Comex April gold futures price up by US20c an ounce to US$1,575.10 per ounce. And the iron ore price rose by US50c to US$146.30 a tonne.

[Kick off your trading day with our newsletter]