Australian Stock Market Report – Morning 4/8/14

US MORNING REPORT
(6am AEDT)

In US economic data, the employment trends index rose from 117.01 to 117.52 in March. Consumer credit rose by US$16.49 billion in February, above the forecast for a US$14.09 billion rise..

European shares fell on Monday. The FTSEurofirst 300 index fell for the first time in 10 days, easing by 1.3% from a 5-1/2 year high. The UK FTSE lost 1.1% and the German Dax lost 1.9%. The Euro STOXX 50 Volatility index rose by 10.5%, signalling a lift in investor risk aversion. Mining shares were also lower in London trade with shares in BHP Billiton down by 1.7% while Rio Tinto lost 1.1%.

US sharemarkets fell again on Monday as investors continued to take profits on high valuation stocks, especially in biotech and broader technology sectors. But defensive sectors - utilities and consumer staples - rose. Investors also were cautious ahead of the start of earnings season with profits from S&P 500 companies expected to rise just 1.2% according to Thomson Reuters data. The Dow Jones index fell by 167 points or 1.0% with the S&P 500 down 1.1%, while the Nasdaq lost 48 points or 1.2%.

US treasury prices were firmer again on Monday (yields lower) as investors took on more of a conservative posture. Reuters notes higher supply this week: ´´US Treasury will sell $30 billion in three-year notes on Tuesday, followed by a $21 billion reopening of a prior 10-year issue on Wednesday and a $13 billion auction of a previous 30-year bond on Thursday.´´ US 2 year yields fell by 2 points to 0.399% while US 10 year yields were down by 2 points to 2.695%.

Major currencies were mixed against the greenback over the European and US sessions on Monday. The Euro lifted from lows around US$1.3700 to near US$1.3750, before ending US trade around US$1.3745. The Aussie dollar fell from highs near US92.95c to lows near US92.55c before finishing US trade around US92.65c. And the Japanese yen held between 103.01 yen per US dollar and JPY103.29 and was near JPY103.07 at the US close.

World oil prices fell on Monday as investors took profits across equities and commodities and embraced US treasuries. Further, investors were watching pro-Moscow rallies in Ukraine while some continued to speculate about a possible lift in Libyan oil exports. Brent crude fell by US90c or 0.8% to US$105.82 a barrel while US Nymex fell by US70c or 0.7% to US$100.44 a barrel.

Base metal prices were generally firmer by up to 0.8% on the London Metal Exchange on Monday, the exceptions being aluminium, down 0.2% and zinc, down 0.3%. The gold price fell on Monday with the Comex futures quote down by US$5.20 an ounce to US$1,298.30 per ounce. Iron ore rose by US$1.50 to US$117.20 a tonne on Monday.

Ahead: In Australia the NAB business survey is scheduled. In the US, weekly chain store sales data is released. Alcoa kicks off earnings season after the bell on Tuesday.

[Kick off your trading day with our newsletter]