Australian Stock Market Report – Morning 4-11-13

US MARKET CLOSE MORNING REPORT
(6.00am AEST)

In US economic news, the FOMC minutes from the March 19/20th meeting were released. Some FOMC members still believed that asset purchases should be tapered later in the year and stopped by year end. But of course the FOMC meeting took place in March before evidence of softening momentum in the US economy started to emerge. We continue to believe that the bond buying program will run into early 2014 at the very least.

European shares hit a one-week closing high on Wednesday and posted their biggest daily rise in three months. Cyclical stocks were the top gainers on the upbeat Chinese import figures. A potential extension of loans to debt-stricken Ireland and Portugal helped several regional indices to outperform. Spanish Banks recorded strong gains supporting the benchmark IBEX (up 3.4pct), while Italy´s FTSE MIB rose 3.2pct. The FTSEurofirst 300 index gained 1.8pct. The UK FTSE index rose 1.2pct while the German Dax was up 2.3pct. Mining shares were higher with BHP Billiton up by 0.4pct in London trade while Rio Tinto rose by 0.1pct.

US sharemarket indices advanced on Wednesday with the Dow Jones and S&P 500 closing at record highs. Gains were broad-based but largely driven by growth stocks. The S&P Technology sector was the best performer up 1.8pct. The Dow Jones index rose by 129pts or 0.9pct. The S&P 500 rose 1.2pct and the Nasdaq gained 59pts or 1.8pct.

US long-term treasuries fell on Wednesday (yields higher) after minutes from the Federal Reserve´s March policy meeting fuelled fears the US central bank might slow or end its bond purchases by year-end. The market sell-off accelerate after an auction of $21 billion in 10yr debt took place at a higher than expected yield. US 2yr yields were flat at 0.23pct while US 10yr yields rose by 5pts to 1.81pct.

The Euro fell against the US dollar on Tuesday on expectations the US Fed will finish its bond buying program by year end. The Euro fell from highs near US$1.3120 to US$1.3050 before settling near US$1.3070 at the close of US trade. The Aussie dollar rose from lows near US105.05c to highs near US105.50c and closed the US session near US105.35c. And the Japanese yen traded between 99.05 yen per US dollar to JPY99.90, and ended US trade at JPY99.80.

World crude oil prices were mixed on Wednesday, after the EIA released its inventory report. US crude stockpiles rose by 250,000 barrels last week to near 39 million barrels - the highest level in 23 years. Brent fell US44c or 0.4pct to US$105.79 and US Nymex crude rose US44c or 0.5pct to US$94.64 a barrel.

Base metal prices were mostly weaker on the London Metals Exchange on Wednesday as traders locked in recent profits. Nickel lost 1pct while copper gave back 0.7pct. And the gold price fell, with the most active Comex June futures price down by US$27.90 an ounce or 1.8pct to US$1,558.80 per ounce. The iron ore price rose by US$1.50 or 1.1pct to US$140.60 a tonne.

Ahead: In Australia, employment figures are released. In the US, the import price index is released.

[Kick off your trading day with our newsletter]