MORNING REPORT
(6.45am AEST)

  • In US economic news, factory orders rose by 2.1pct in May following a 1.3pct gain in April. The US economic news flow remains pretty decent.
  • New York Fed President William Dudley repeated comments made last week, saying the central bank is likely to support the economic recovery for some time.
  • European shares drifted lower in thin trade on Tuesday. The blue chip Euro STOXX 50 fell by 0.8pct after failing to break above the 200-day moving average in the previous session. The FTSEurofirst 300 index fell by 0.5pct with the German Dax down by 0.9pct while the UK FTSE lost 0.1pct. Mining shares were weaker in London trade with BHP Billiton down by 0.2pct while Rio Tinto lost 1.5pct.
  • US share markets gave back early gains to close lower on Tuesday. Earlier in the session concerns receded about the Federal Reserve´s plans to pare its bond buying program, while upbeat car sales data for June supported automakers. Ford motors rose by 2.8pct and GM gained 0.4pct. However investors were waiting on the key payrolls numbers out on Friday. The Dow Jones fell by 43pts or 0.3pct with the S&P 500 down 0.1pct while the Nasdaq lost 1pt.
  • US long term treasuries rose on Monday (yields lower) as traders waited on the all-important payrolls numbers later this week to gauge if the Fed will begin tapering stimulus. US 2yr yields were unchanged at 0.36pct and US 10yr yields fell by 1pt to 2.47pct.
  • The US dollar rallied against major currencies on Tuesday as solid economic data supported a tapering of US stimulus. The Euro fell from highs near US$1.3075 to lows near US$1.2965 ending US trade near US$1.2975. The Aussie dollar fell from highs near US92.10c to lows around US91.25c and ended US trade near US91.40c. And the Japanese yen traded between 99.65 yen per US dollar and JPY100.70, before ending US trade at JPY100.65.
  • World crude oil prices rose on Tuesday hitting a nine-month high as turmoil in the Middle East unsettled investors. Brent crude rose by US$1 or 1pct to US$104.00 and US Nymex crude rose by US$1.61 or 1.6pct to US$99.60 a barrel.
  • Base metal prices were mixed in London trade on Tuesday on as a stronger US dollar weighed on prices. Copper fell by 0.9pct while Tin rose by 1.3pct. And the gold price fell on Tuesday. Comex August futures price fell by $12.30 an ounce or 1pct to US$1,243.40 per ounce. And the iron ore price rose by US$2.40 to US$119.30 tonne.
  • Ahead: In Australia the HIA new home sales, trade balance, retail trade, and PSI are released. Also RBA Governor Stevens speaks in Brisbane. In the US, trade data and the ISM non-manufacturing index are released.

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