Australian Stock Market Report – Morning 4/4/14

US MORNING REPORT
(7.00am AEDT)

In US economic data, the ADP Private Employment report showed job gains of 191,000 for the private sector in March mostly in line with forecasts. The February result was revised up from 139,000 to 178,000. US factory orders jumped 1.6% in February. Shipments of new orders lifted by 0.9% in February - the biggest gain in seven months. However the prior January result was revised to show a larger fall of 1%.

European shares recorded modest gains on Wednesday as expectations of fresh ECB stimulus supported buying. Broker upgrades for the food giant Nestle (up 1.5%) propped up indices. The FTSEurofirst 300 index rose for the seventh straight session, up by 0.2% with the UK FTSE up 0.1%, while the German Dax lifted by 0.2%. Mining shares posted form gains in London trade with shares in BHP Billiton up by 1.9% while Rio Tinto rose by 0.1%.

US sharemarkets recorded solid gains on Wednesday in response to firmer economic data which suggested the economy was lifting after the cold weather earlier in the year. Eight of the 10 S&P sectors were higher. The Dow Jones index closed higher by 40 points or 0.2% with the S&P 500 up by 0.3% to a fresh record high, while the Nasdaq rose by 8 points or 0.2%.

US treasury prices were weaker on Wednesday (yields higher) in response to encouraging US private sector employment data and expectation for a solid read on the non-farm payrolls numbers on Friday. US 2 year yields rose by 2 points to 0.46% while US 10 year yields were up 5 points to 2.81%.

Major currencies were mixed against the greenback over the European and US sessions on Wednesday. The Euro fell from highs near US$1.3815 to US$1.3755 ending US trade around US$1.3765. The Aussie dollar rose from lows near US92.30c to highs near US92.65c before easing to around US92.40c at the US close. And the Japanese yen traded in a tight range between 103.55 yen per US dollar to JPY103.85 and was near JPY103.80 at the US close.

World oil prices fell on Wednesday on expectations that three rebel-held Libyan ports will reopen within days - representing 600,000 barrels per day in export capacity. Traders ignored US inventory data which showed domestic crude stockpiles falling by 2.4 million barrels last week against expectations of a 1.1 million barrel build. Brent crude fell by US80c or 0.8% to US$104.82 a barrel while US Nymex crude fell by US12c or 0.1% to US$99.62 a barrel.

Base metal prices were generally higher by up to 1% on the London Metal Exchange on Wednesday with nickel leading the gains. The gold price rose on Wednesday with the Comex futures quote up by US$10.80 an ounce to US$1,290.80 per ounce. Iron ore fell by US$2.30 to US$115.30 a tonne on Tuesday.

Ahead: In Australia retail sales, the PSI and trade data are released. Also the Reserve Bank Governor Stevens delivers a speech in Brisbane. In the US, the ISM non-manufacturing survey is released.