Australian Stock Market Report – Morning 9/25/13

MORNING REPORT(6am AEST)

In US economic news, consumer confidence fell from 81.8 to 79.7 in September, short of forecasts for a result near 79.9. The Case Shiller home price index rose 0.6pct in July to be up 12.4pct on a year ago. The FHFA home price index rose 1.0pct in July and8.8pct over the year and the Richmond Fed composite index eased from +14 to zero in September. The Redbook chain store sales index also was 3.6pct up over the year, compared with a 3.4pct gainin the previous week.

European shares rose on Tuesday, with investors encouraged by a lift in merger & acquisition news in the telecoms sector. The FTSEurofirst 300 index rose by 0.2pct with the German Dax up by 0.3pct and the UK FTSE higher by 0.2pct. Mining shares were mixed with Rio Tinto up by 0.2pct in London trade while BHP Billiton fell by 0.8pct.

US sharemarkets were mixed on Tuesday. A key focus forinvestors is the political wrangling over lifting the debt ceiling. But shares in homebuilder Lennar rose 4.3pct after better-than expected earnings data. The Dow Jones rose in the morning session to be up 33 points, but after trending sideways it weakenedover the last two hours of trade. At the close the Dow Jones was down for the fourth straight session, easing by almost 67pts or 0.4pct while the S&P 500 lost 0.3pct. But the Nasdaq rose by 3pts or 0.1pct.

US long-term treasuries rose for a third day on Tuesday (yields lower) as investors became comfortable with the view that the Federal Reserve will wind back stimulus only slowly in comingmonths. US Treasury sold $33 billion in two-year notes at a high yield of 0.348 per cent. It will sell five-year notes on Wednesday and seven-year notes on Thursday. US 2yr yields were down 1pt to 0.33pct and US 10yr yields fell by 5pts to 2.655pct.

The US dollar drifted modestly higher against the Euro and commodity currencies in the European and US sessions on Tuesday. The Euro fell from around US$1.3515 to near US$1.3465 and ended US trade near US$1.3475. The Aussie dollar fell from highs near US94.15c to US94.65c before ending US trade nearUS93.90c. And the Japanese yen lifted from 99.15 yen per US dollar to JPY98.49, ending US trade near JPY98.74.

World oil prices were mixed on Tuesday. Iran has agreed to talks with Western nations on its nuclear programme. And Iraq boosted oil output after stopping a pipeline leak. Brent crude rose by US48c or 0.4pct to US$108.64 a barrel. But US Nymex fell by US46c or0.4pct to US$103.13 a barrel.

Base metal prices fell between 0.3-1.4pct on Tuesday with tin down the least and copper and nickel down the most. Gold fell for the third straight session as the US dollar continued to claw back losses. The Comex December futures price fell by US$10.70 anounce or 0.8pct to US$1,316.30 per ounce. The iron ore price rose by US30c to US$132.70 a tonne on Monday.
Ahead: The Reserve Bank´s Financial Stability Review is issued. David Jones and Nufarm release full year results. In the US, durable good orders data is released together with new home sales.

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