Australian Stock Market Report – Morning 4/22/14

MORNING REPORT
(7am AEST)

In US economic data, the national activity index eased from a revised reading of +0.53 points in February to +0.20 points in March. The leading index rose by 0.8% in March, higher than the market expectation for a gain of +0.7%.

There was no trading on European financial markets on Friday and Monday. On Thursday the FTSEurofirst 300 index rose by 0.5% with the German Dax higher by 1.0% while the UK FTSE rose by 0.6%. Mining shares were mixed in London trade on Thursday with shares in BHP Billiton up by 0.2% while shares in Rio Tinto fell by 0.5%.

US sharemarkets rose on Monday in thin trade ahead of a big week of earnings results. According to Thomson Reuters, of the 87 companies in the S&P 500 that have reported results through Monday, about 62.1% have topped earnings expectations, compared with the 66% average over the past four quarters. Traders were watching news of a potential merger between gold producers Newmont and Barrick Gold. Shares in Barrick Gold fell by 3.9% while Newmont rose by 6.4%. The Dow Jones index rose by 40 points or 0.3% with the S&P 500 up by 0.4%, while the Nasdaq rose by 26 points or 0.6%.

US long-term treasury prices rose modestly on Monday (yields lower) as bargain hunters moved in after sharp losses last Thursday. US 2 year yields fell by 2 points to 0.395% while US 10 year yields eased 1 point to 2.715%. Last week US 2 year yields rose by 3 points and US 10 year yields rose by 8 points.

Major currencies held in tight ranges against the greenback in European and US trade on Monday. The Euro held between US$1.3785 and US$1.3830, before ending US trade around US$1.3795. The Aussie dollar held between US93.15c and US93.45c before finishing US trade around US93.25c. And the Japanese yen held between 102.49 yen per US dollar and JPY102.67 and was near JPY102.61 at the US close.

World oil prices rose modestly on Monday. Investors continue to watch geopolitical developments in Ukraine and the potential for a reopening of Libyan ports. Brent crude rose by US42c or 0.4% to US$109.95 a barrel while US Nymex rose by US7c to US$104.37 a barrel.

Base metal prices were mixed on Thursday on the London Metal Exchange, rising or falling by up to 0.5%. There was no trading on Friday and Monday. The Comex gold futures quote fell by US$5.40 an ounce or 0.4% on Monday to US$1,288.50 per ounce - a two-week low. The iron ore price stands at US$113.30 an ounce, down from US$116.50 a tonne on Thursday.

Ahead: In Australia, no major economic data is scheduled. In the US, data on existing home prices, FHFA home prices and the Richmond Federal Reserve index are released.

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