Australian Stock Market Report - Morning 4/2/2011
US ICSC comparable chain store sales rose by 4.8pct in January from a year earlier. Apparel, wholesale and luxury sales all recorded healthy gains. The ISM non-manufacturing survey rose from 57.1 to 59.4 in January - marking the fastest pace of growth since August 2005. US total factory orders rose 0.2pct in December, contrary to forecasts for a 0.5pct decline.
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US jobless claims fell by a more than expected 42,000 to 415,000 in the past week. The JP Morgan Global Services PMI rose from 56.9 to 58.2 in January - marking the 18th straight month of growth. The all-industry index which combines manufacturing and services data, rose from 57.0 to 58.3 in January - its highest reading in nearly five years.
European shares eased modestly on Thursday hit by weak earnings results Royal Dutch Shell and Santander. The European Central Bank hosed down speculation of a near-term rate hike - helping equities pare early losses. The FTSEurofirst index fell by 0.1pct with the UK FTSE down 0.3pct and the German Dax was higher by 0.1pct.
US sharemarkets traded in a tight range for most of the session, as investors awaited Friday´s payrolls data. Retail stocks received a boost following the strength in chain store sales. The Morgan Stanley retail index rose 2.8pct. Material and energy stocks were weaker as investor locked in recent profits. At the close of trade, the Dow Jones index was up by 20pts with the S&P 500 up 0.2pct and the Nasdaq higher by 4pts.
US treasuries fell on Thursday (yields higher). Better-than-expected economic data and the threat of rising inflation pulled yields higher. US 2yr yields rose by 4pts to 0.71pct and US 10yr yields rose by 7pts to 3.55pct.
The Euro recorded broad based falls, after the ECB suggested inflation remains under control and interest rates are unlikely to rise anytime soon. The Euro fell from highs near US$1.3825 to US$1.3610, and was near US$1.3630 in late US trade. The Aussie dollar hit early lows around US100.85c before rising to US101.55c, and was around US101.60c in late US trade. And the Japanese yen traded between 82.05 yen per US dollar to around JPY81.45, and was near JPY81.60 in late US trade.
US crude oil prices fell on Thursday following the rebound in the US dollar. The Nymex crude oil contract fell by US32c or 0.4pct to US$90.54 a barrel. London Brent crude fell by US73c to US$101.53 a barrel.
Base metal prices were marginally weaker on the London Metal Exchange as US dollar strength pressured commodities. Lead led the declines down 0.7pct. However the gold price rebounded after recent losses. The Comex gold futures price rose US$20.90 an ounce to US$1,353.00.
Ahead: In Australia, the Reserve Bank Monetary Policy Statement is released. In the US, non-farm payrolls are released.