Australian Stock Market Report – Morning December 12, 2014

Retailer — Shoppers look over items on sale at a Macy's store in New York, November 23, 2012. Reuters/Keith Bedford

* In US economic data, retail sales rose by 0.7% in November (well ahead of expectations of 0.4%). Excluding gasoline, sales lifted by 0.9%. The gains were broad-based and confirmed a lift in discretionary spending. Core retail sales (excluding automobiles, gasoline, building material and food services) lifted by 0.6%. US jobless claims fell by 3,000 to 294,000 in the past week. US import prices fell 1.5% in November driven by a 6.9% slide in oil prices. US business inventories rose 0.2% in October after a 0.3% gain in September.

* European shares were mixed on Thursday, supported by the lift on Wall St. However Greek shares fell for a third straight session as the upcoming presidential election sparked concerns about political instability. The Greek ATG stock index fell 7.4% taking losses for the week to 20%. The FTSEurofirst 300 index was flat while the German Dax rose by 0.6%%. The UK FTSE lost 0.6%. In London trade shares in BHP Billiton fell by 1.8% while Rio Tinto lost 1.8%.

* US sharemarkets rallied on Thursday boosted by the strength in retail activity and ongoing improvement in the US labour market. The S&P retail index jumped 1%, driven by a 1.2% rise in Home Depot shares. Energy stocks recovered part of the recent losses. At the close of trade, the Dow Jones was higher by 63 points or 0.4%, after being up as much as 225 points. The S&P 500 index rose by 0.5%, while the Nasdaq rose by 24 points or 0.5%.

* US treasuries fell on Thursday (yields higher) after the upbeat retail sales result supported an improvement in risk appetite. US 2 year yields rose by 4 points to 0.612% while US 10 year yields rose by 1 points to 2.174%.

* Major currencies were fell against the greenback in European and US trade on Thursday. The Euro fell from highs near US$1.2480 to around US$1.2370 and was near US$1.2390 in late US trade. The Aussie dollar fell from highs near US83.45c to around US82.30c and was around US82.60c in late US trade. And the Japanese yen weakened from 117.90 yen per US dollar to JPY119.55 and was near JPY118.90 in late US trade.

* World oil prices eased on Thursday stabilising near five-year lows. The upbeat consumer spending data and rate cut in Norway provide a respite for the slide in oil prices. Brent crude fell by US52c or 0.8% to US$63.72 a barrel. US Nymex crude price fell by US99c or 1.6% to US$59.95 a barrel.

* Base metal prices were mixed on the London Metal Exchange on Thursday. Lead fell by 1.7%, while tin (up 0.8%), zinc (up 0.7%) and copper (up 0.6%) managed to record modest gains. Gold fell on Thursday as investors shifted out of safe-haven assets. The Comex gold futures price was down by US$3.80 an ounce or 0.3% to US$1,225.60 per ounce. Iron ore fell by US10c to US$68.80 a tonne on Thursday.

Ahead: In Australia lending finance data is released. In the US, consumer confidence is released. Chinese retail sales, industrial production and fixed asset investment figures are released.

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