Australian Stock Market Report – Morning 9/6/2012

MORNING REPORT
(6am AEST)

The US Redbook weekly chain store sales index was up 2.5pct on a year ago, ahead of the 1.5pct annual gain in the previous week. US productivity grew at a 2.2pct annual pace in the June quarter while labour costs rose at a 1.5pct annual rate.

European shares were mixed on Wednesday as investors awaited the European Central Bank decision on interest rates and bond buying plans. The benchmark FTSEurofirst 300 index was up less than 0.1pct while the UK FTSE eased 0.3pct and German Dax gained 0.5pct. But mining shares were weaker with BHP Billiton down 2.7pct in London trade and Rio Tinto down 0.2pct.

US sharemarkets ended mixed on Wednesday with investors electing not to take on major positions ahead of key events later in the week. But shares in Nokia slumped 16pct with investors unimpressed by its latest phone offering. The European Central Bank may unveil a bond buying program on Thursday while key US jobs data is released on Friday. The Dow Jones rose by 11.5pts or 0.1pct with the S&P 500 down by 0.1pct while the Nasdaq lost 6pts or 0.2pct.

US treasuries were flat on Wednesday as investors awaited US employment data on Friday and meetings by the European Central Bank and Bank of England. US 2yr yields were flat at 0.238pct and US 10yr yields rose 1pt to 1.594pct.

The Euro rose against the US dollar over European and US sessions but other currencies traded sideways ahead of central bank meetings and key US data later in the week. The Euro rose from lows in the session near US$1.2500 to US$1.2620 and closed US trade near US$1.2600. The Aussie dollar traded between US101.65c and US102.10c and ended US trade near US101.85c. And the Japanese yen traded between 78.29 yen per US dollar and JPY78.45 and ended US trade near JPY78.39.

Benchmark crude oil prices were mixed on Wednesday as investors squared positions ahead of key economic data and interest rate decisions. Traders also note that oil facilities in the Gulf of Mexico were getting back into operation quickly after last week´s passing of Hurricane Isaac through the region. Brent crude fell by US$1.09 to US$113.09. US Nymex crude rose by US6c to US$95.36 a barrel.

Base metal prices were again stronger on the London Metals Exchange on Wednesday, lifting between 0.4-1.9pct. Aluminium led the gains while tin prices trailed. But the gold price eased as investors took profits ahead of the European Central Bank meeting. The December Comex gold futures price fell from five-month highs, easing by US$2.00 an ounce to US$1,694.00 an ounce.

Ahead: In Australia, August employment figures are released together with the Performance of Construction index. In the US, the ADP employment report and ISM services index are released. The European Central Bank and UK Bank of England announce interest rate decisions.

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