Australian Stock Market Report – Morning 3/26/14

US MORNING REPORT
(7am AEDT)

In US economic data, the Conference Board consumer confidence measure lifted from 78.2 to 82.3 in March -a six-year high. Better weather and an improving labour market could lift confidence further. The S&P/Case-Shiller composite index of home prices in 20 metropolitan areas rose 0.8% in January. Prices rose 13.2% on a year ago. New home sales fell by 3.3% in February to an annual rate of 440,000 - the lowest level since September.

European shares rebounded on Tuesday, lifted by expectations of stimulus measures from the European Central Bank. ECB governing council member Jens Weidmann said policymakers were not ruling out buying loans and other assets from banks to support the euro zone. The FTSEurofirst 300 index rose by 1.3% with the UK FTSE also up by 1.3%, while the German Dax gained 1.6%. Mining shares rose in London trade with shares in BHP Billiton up by 2.3% while Rio Tinto gained 2.9%.

US sharemarkets rose in late trade on Tuesday supported by a rebound in biotech shares. The Nasdaq biotech index had initially fallen by 1% before closing up 0.1%. Shares in Netflix fell by 2.1%. The Dow Jones index closed higher by 91 points or 0.6% with the S&P 500 up 0.4% and the Nasdaq gained 8 points or 0.4%.

US treasury prices were mixed on Tuesday after a auction of $32 billion in two-year notes was met with solid demand. However light purchases by dealers raised some concerns for the upcoming $35 billion in five-year notes on Wednesday. Dealers only bought 37.5% of the auction well down on their average of 49%. US 2 year yields fell 2 points to 0.43% while US 10 year yields rose by 2 points to 2.75%.

Major currencies were mixed against the greenback over the European and US sessions on Tuesday. The Euro fell from highs near US$1.3845 to US$1.3765 and ended US trade around US$1.3820. The Aussie dollar rose from lows near US91.20c to highs near US91.70c and was around US91.60c at the US close. And the Japanese yen eased from 102.10 yen per US dollar to JPY102.45 and was near JPY102.25 at the US close.

World oil prices were mixed as speculation of fresh Chinese stimulus and renewed geopolitical risks over Russia was offset by a stronger US dollar. Supply disruptions in Libya and Nigeria also added to the uncertainty. Brent crude rose by US18c or 0.2% to US$106.99 a barrel while US Nymex crude fell by US41c or 0.4% to US$99.19 a barrel.

Base metal prices lifted on the London Metal Exchange on Tuesday, with zinc (up 2.5%) and copper (up 2%) the best performers. The gold futures price rose mildly from five week lows on Tuesday. The Comex futures price lifted by US20c an ounce to US$1,311.40 per ounce. Iron ore rose by $1.30 to US$111.80 a tonne on Tuesday.

Ahead: In Australia the Reserve Bank Governor Stevens delivers a speech in Hong Kong. In the US, durable goods orders are released.

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