Australian Stock Market Report – Morning 9/26/13

MORNING REPORT
(6am AEST)

In US economic news, orders for durable goods - goods expected to last more than three years - rose by 0.1pct in August, in line with expectations. Excluding defence and aircraft, orders rose by 1.5pct, just short on the 1.9pct expected rise. New home sales soared by 7.9pct in August to a 421,000 annual rate, in line with forecasts.

European shares ended little-changed on Wednesday, reflecting mixed results across the region´s bank stocks. The FTSEurofirst 300 index fell by 0.1pct with the German Dax up by 1 point or less than 0.1pct while the UK FTSE was down 0.3pct. Mining shares
were higher in response to firmer commodity prices with Rio Tinto up by 1.0pct in London trade while BHP Billiton rose by 0.3pct.

US sharemarkets eased again on Wednesday. There was little progress in the political wrangling over lifting the debt ceiling. And economic data largely met forecasts. Shares in Facebook rose 2.1pct in response to broker upgrades but shares in retailer JC
Penney fell by 15pct to a 13-year low on a soft sales outlook. The Dow Jones fell for the fifth straight session, easing by 61pts or 0.4pct while the S&P 500 lost 0.3pct and the Nasdaq lost 7pts or 0.2pct.

US long-term treasuries rose for a fourth day on Wednesday (yields lower) with economic data and wrangling over the US debt ceiling and federal budget supporting the view that the Federal Reserve will wind back stimulus only slowly in coming months. US
Treasury sold $35 billion in five-year notes on Wednesday and will sell seven-year notes on Thursday. US 2yr yields rose 1pt to 0.34pct and US 10yr yields fell by 4pts to 2.62pct.

The US dollar eased against major currencies in the European session before consolidating over the US session on Wednesday. The Euro rose from lows around US$1.3465 to near US$1.3535 and ended US trade near US$1.3530. The Aussie dollar rose from lows near US93.40c to US93.85c before ending US trade near
US93.70c. And the Japanese yen held between 98.38 yen per US dollar and JPY98.79, ending US trade near JPY98.45.

World oil prices fell on Wednesday on an easing of supply concerns. Comments from the Iranian foreign minister boosted hopes for talks with Western nations on Iran´s nuclear program. And Iraq and Libya lifted oil output and exports respectively. Brent crude
fell by US32c or 0.3pct to US$108.32 a barrel while US Nymex fell for the fifth day, dropping US47c or 0.5pct to US$102.66 a barrel.

Base metal prices rose between 0.5-1.2pct on Wednesday, reversing the previous day´s falls. Tin rose the most while aluminium was up the least. Gold rose for the first time in four sessions with the Comex December futures price up by US$19.90 an ounce or 1.5pct to US$1,336.20 per ounce. The iron ore price rose by US$1.10 to US$133.80 a tonne on Wednesday.

Ahead: The financial accounts are released together with population estimates and job vacancies. In the US, economic growth (GDP) figures are released together with weekly jobless claims and pending home sales.

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