Australian Stock Market Report – Morning 3/11/14

US MORNING REPORT
(7am AEDT)

In US economic data, the employment trends index rose from 115.99 to 116.39 in February.

European shares generally fell on Monday in response to data showing a slowing Chinese economy as well as the ongoing tensions in Ukraine. The FTSEurofirst 300 index fell by 0.4%, while the UK FTSE also lost 0.4% and the German Dax fell by 0.9%. But shares in Italy rose 0.6% with Spain up 0.3%, boosted by banking shares. Mining shares eased in London trade in response to a slump in the iron ore price and mixed metal prices with shares in BHP Billiton down by 1.4% while Rio Tinto lost 1.9%. And shares in German steel maker ThyssenKrupp lost 3%.

US sharemarkets fell on Monday but finished off the lows for the day. Shares in Boeing lost 1.0% on production delays to the 787 Dreamliner aircraft and concerns related to the disappearance of a Malaysian Airlines 777 aircraft. Shares in United Rentals rose by 3.8% after the world´s largest equipment rental company agreed to buy National Pump, the No.2 specialty pump rental company in North America for $780 million. After being down 118 points, the Dow Jones index closed lower by 34 points or 0.2%. The S&P 500 lost less than 1 point or 0.1% and the Nasdaq lost almost 2 points or less than 0.1%.

US longer-term treasury prices rose on Monday (yields lower) as investors drifted towards safe-haven assets like gold and government bonds in response to weakness in the Chinese economy and tensions in Ukraine. US 2 year yields fell by 1 point to 0.37% while US 10 year yields fell 2 points to 2.78%.

Major currencies eased modestly against the greenback on Monday. The Euro traded between US$1.3860 and US$1.3895 and ended US trade around US$1.3875. The Aussie dollar eased from near US90.55c to lows near US90.10c and was around US90.20c at the US close. And the Japanese yen weakened from near 102.93 yen per US dollar to JPY103.40 and was near JPY103.24 at the US close.

World oil prices fell on Monday. The fear is that a slowdown in the Chinese economy and ongoing tensions between Ukraine and Russia could crimp global oil demand. Brent crude fell by US92c or 0.8% to US$108.08 a barrel while US Nymex crude fell by US$1.46 or 1.4% to US$101.12 a barrel.

Base metal prices were mixed on the London Metal Exchange on Monday. Copper lead and zinc fell up to 2.1% but other metals rose with nickel up 1.0%. The Comex gold futures price rose by US$3.30 an ounce or 0.2% to US$1,341.50 per ounce. Iron ore slid by US$9.50 or 9.1% to US$104.70 a tonne - the lowest quote since October 5 2012.

Ahead: In Australia the NAB business survey is released while overseas arrivals and departures data is issued. In the US weekly chain store sales data is released with wholesale inventories and sales.

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