Australian Stock Market Report – Morning December 16, 2014

A man carries an umbrella in the rain as he passes the New York Stock Exchange October 16, 2014. Stocks on Wall Street rebounded from earlier lows on Thursday to trade little changed as a flurry of economic reports helped ease fears a weakening global eco — A man carries an umbrella in the rain as he passes the New York Stock Exchange October 16, 2014. Reuters/Brendan McDermid

* In US economic data, industrial production rose by 1.3% in November after advancing by 0.1% in October - marking the largest rise since May 2010. Capacity utilisation rose from 79.3 to 80.1 - the highest reading since March. The New York Fed Empire State index fell from +10.16 to -3.58 in December - the first negative result in almost a year. US NAHB Housing Market Index eased from 58 to 57 in December - highlighting that home builder sentiment remained relatively optimistic.

* European shares tumbled on Monday, resuming last week's sharp sell-off. The drop in oil prices hurt energy shares and fuelled fears of deflation in the euro zone. The STOXX Basic Resources Index fell by 2.9%. The FTSEurofirst 300 index fell by 2.4%, the German Dax fell by 2.7%, while the UK FTSE fell by 1.9%. In London trade shares in BHP Billiton lost 3.7% while Rio Tinto gave back 2.5%.

* US sharemarkets fell on Monday as concerns about global growth hurt sentiment. Despite the fall in oil prices the S&P energy sector outperformed falling by just 0.2%. The S&P utilities (down 1.2%) and financial (down 0.8%) sectors were amongst the worst performers. At the close of trade left, the Dow Jones was down by 100 points or 0.6%. The S&P 500 index was down by 0.6% and the Nasdaq lost 48 points or 1%.

* US treasuries fell on Monday (yields higher) ahead of the US FOMC meeting in coming days. US 2 year yields rose by 4pts to 0.585% while US 10 year yields rose by 3pts to 2.115%.

* Major currencies were mostly weaker against the greenback in European and US trade on Monday. The Euro fell from highs near US$1.2475 to lows near US$1.2420, and was around US$1.2435 in late US trade. The Aussie dollar fell from highs near US82.65c to around US82.00c and traded near US82.10c in late trade. And the Japanese yen traded between 118.95 yen per US dollar to JPY117.55 and was near JPY117.70 in late US trade.

* World oil prices fell to fresh 5-year lows, after OPEC said it would not cut oil output despite fears of excess supply. The UAE oil minister rejected calls for another OPEC emergency meeting. Brent crude fell by US93c or 1.5% to US$60.92 a barrel while the US Nymex crude price fell by US$1.90 or 3.3% to US$55.91 a barrel.

* Base metal prices were mostly weaker on the London Metal Exchange on Monday with the exception of Tin (unchanged). Copper and nickel both lost 1.4% while lead gave back 1.5%. Gold fell with Comex gold futures down by US$14.80 an ounce or 1.2% to US$1,207.70 per ounce. Iron ore fell by US10c to US$68.60 a tonne on Monday.

Ahead: In Australia, Reserve Bank Board minutes are released alongside weekly consumer confidence figures. In the US, housing starts and building permits are released.

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