Australian Stock Market Report – Morning 3/24/14

US MORNING REPORT
(6am AEDT)

In US economic data, the weekly Economic Cycle Research Institute index eased from 133.8 to 132.9 but was up 2.3% over the year compared with a 2.1% annual gain in the previous week.

European shares rose modestly on Friday. Investors were watchful on the reaction to US and European sanctions on Russian politicians. The FTSEurofirst 300 index rose by 0.1% on Friday to be up by 1.8% over the week. The UK FTSE rose by 0.2%, while the German Dax gained 0.5%. Mining shares were firmer in London trade with shares in BHP Billiton up by 0.9% while Rio Tinto lifted by 1.6%. Thomson Reuters noted the basic resources sector was higher after Chinese ´´Premier Li Keqiang said on Thursday the world´s top metals consumer will speed up investment and construction plans to ensure domestic demand expands at a stable rate.´´

US sharemarkets eased on Friday in response to profit-taking with biotechs leading declines. The Dow Jones index closed lower by 28 points or 0.2% with the S&P 500 down 0.3% and the Nasdaq lost 42 points or 1.0%. For the week, the Dow rose by 1.5%, the S&P rose by 1.4% and the Nasdaq lifted by 0.7%.

US longer-term treasury prices rose modestly on Friday (yields lower) in response to end-week bargain hunting and position squaring. US 2 year yields were flat near 0.429% while US 10 year yields fell by 3 points to 2.744%. Over the week US 2 year yields rose by 7 points and US 10 year yields rose by 6 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$1.3765 to US$1.3810 and ended US trade around US$1.3795. The Aussie dollar rose from lows near US90.55c to highs near US91.00c and was around US90.80c at the US close. And the Japanese yen held between 102.01 yen per US dollar and JPY102.39 and was near JPY102.23 at the US close.

World oil prices rose on Friday on fears that new sanctions on Russia could end up leading to disruptions to oil supplies. Brent crude rose by US47c or 0.4% to US$106.92 a barrel while US Nymex crude rose by US56c or 0.6% to US$99.46 a barrel. Over the week Brent lost US$1.65 or 1.5% but Nymex rose by US57c or 0.6%.

Base metal prices rose by up to 1.6% on the London Metal Exchange on Friday with nickel leading the way. But tin bucked the trend, falling by 0.7%. Over the week metals were mixed with nickel up 2.3% and lead up 1.6% but other metals fell up to 1.7%. The gold futures price rose in bargain hunting on Friday but still ended the week lower. The Comex futures price was up by US$5.50 an ounce or 0.4% to US$1,336 per ounce. Over the week gold lost $43 or 3.1%. Iron ore was steady at US$110.70 a tonne on Friday and rose US60c over the week.

Ahead: In Australia no major economic data is expected. In the US, Europe and China ´´flash´´ purchasing manager indexes are expected for March.

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