Australian Stock Market Report – Morning 3/17/14

US MORNING REPORT
(5.15am AEDT)

In US economic data, producer prices fell by 0.1% in February while core prices (excludes food and energy) fell by 0.2%. Both results were weaker than forecast. Consumer sentiment fell from 81.6 to 79.9 in March, below forecasts near 82.0.

A Russian news agency has claimed an exit poll indicates that 93% of voters in Crimea support union with Russia.

European shares fell on Friday ahead of Sunday´s referendum in Crimea. The FTSEurofirst 300 index fell by 0.7% on Friday to be down 3.2% over the week. The UK FTSE lost 0.4%, but the German Dax bucked the trend, up by 0.4%. Mining shares were weaker in London trade with shares in BHP Billiton down by 0.2% while Rio Tinto fell by 0.7%.

US sharemarkets fell on Friday. Investors lightened holdings of equities ahead of Sunday´s referendum to decide the future of Crimea. And economic data was weaker than expected. The Dow Jones index closed lower by 43 points or 0.3% with the S&P 500 down 0.3% and the Nasdaq lost 15 points or 0.4%. For the week, the Dow fell by 2.3%, the S&P lost 2% and the Nasdaq fell by 2.1%.

US longer-term treasury prices were little-changed as investors awaited the results of the Crimean referendum. US 2 year yields were flat near 0.346% while US 10 year yields rose by 1 point to 2.656%. Over the week US 2 year yields rose by 1 point and US 10 year yields rose by over 13 points.

Major currencies were generally firmer against the greenback by the end of the US session on Friday compared with the end of Australasian trade. The Euro rose from lows near US$1.3845 to US$1.3930 and ended US trade around US$1.3915. The Aussie dollar rose from lows near US89.95c to highs near US90.45c and was around US90.30c at the US close. And the Japanese yen lifted from near 101.80 yen per US dollar to JPY101.20 and was near JPY101.35 at the US close. This morning the Euro is near US$1.3895; Aussie is near US90.05c; and the Japanese Yen is at JPY101.30.

World oil prices rose on Friday with investors fearful about potential supply disruptions in Europe if the on-going tensions between Ukraine and Russia lead to trade sanctions. Brent crude rose by US$1.18 or 1.1% to US$108.57 a barrel while US Nymex crude rose by US69c or 0.7% to US$98.89 a barrel. Over the week Brent lost US43c and Nymex lost US$3.69.

Base metal prices were mixed on the London Metal Exchange on Friday. Lead rose 1.0% and copper gained 0.8% but other metals fell up to 0.3%. Over the week zinc fell 5% and copper lost 4.6% but nickel rose 2.9%. The Comex gold futures price rose to fresh six-month highs ahead of the Crimean referendum, up by US$6.60 an ounce or 0.5% to US$1,379 per ounce. Over the week gold rose $40.80 or 3%. Iron ore fell by US$1.40 on 1.3% on Friday to US$110.10 a tonne and lost US$4.10 over the week.

Ahead: In Australia data on new car sales is expected. In the US, data on capital flows, production, and the New York Federal Reserve manufacturing survey are expected.

[Kick off your trading day with our newsletter]