Australian Stock Market Report – Morning 3/28/14

US MORNING REPORT
(7am AEDT)

In US economic data, the economy grew at a 2.6% annualised pace in the December quarter, up from the 2.4% prior estimate and just short of forecasts. New claims for unemployment insurance fell by 10,000 to 311,000 in the latest week, well below forecasts centred near 325,000. But the pending home sales index eased 0.8% in February. Economists had tipped a flat result.

European shares were mixed on Thursday in response to corporate news. The FTSEurofirst 300 index rose by 0.2% with the UK FTSE down 0.3%, while the German Dax gained 2.6 points or less than 0.1%. Mining shares were mixed in London trade with shares in BHP Billiton up by 0.1% while Rio Tinto lost 0.9%.

US sharemarkets meandered through Thursday´s session as investors weighed mixed corporate and economic news. Shares in Citigroup fell by 5.4% after the Federal Reserve rejected the company´s plans to buy back shares and lift dividends. The Dow Jones index closed lower by 5 points or less than 0.1% after being down 77 points in early trade and being up 32 points at one stage. The S&P 500 was down 0.2% and the Nasdaq lost 22 points or 0.5%.

US long-term treasury prices rose on Thursday (yields lower) after an auction of $29 billion in seven-year notes was met with strong demand. According to Reuters ´´direct bidders, which includes some central banks and large asset managers, bought 33% of the notes, higher than their average 19%.´´ US 2 year yields were flat at 0.45% while US 10 year yields fell by 2 points to 2.68%.

Major currencies were mixed against the greenback over the European and US sessions on Thursday. The Euro fell from highs near US$1.3795 to US$1.3730 and ended US trade around US$1.3745. The Aussie dollar rose from lows near US92.25c to near US92.70c and was around US92.55c at the US close. And the Japanese yen held between 101.98 yen per US dollar and JPY102.40 and was near JPY102.12 at the US close.

World oil prices rose on Thursday as investors responded to generally firmer US economic data. Investors also continued to watch the geopolitical situation in eastern Europe. The US and European Union are planning fresh sanctions against Russia. Brent crude rose by US80c or 0,7% to US$107.83 a barrel while US Nymex crude rose by US$1.02 or 1.0% to US$101.28 a barrel.

Base metal prices generally rose up to 0.9% on the London Metal Exchange on Thursday. But nickel fell by 1.2% and tin lost 0.7%. The gold price fell to the lowest levels since February with the Comex futures quote down by US$8.70 an ounce to US$1,294.70 per ounce. Iron ore rose by 40c to US$112.30 a tonne on Thursday.

Ahead: In Australia no major data is scheduled. In the US, personal income data and March consumer sentiment data are released.

[Kick off your trading day with our newsletter]