Australian Stock Market Report – Morning December 4, 2014

Traders work on the floor of the New York Stock Exchange, December 11, 2008. U.S. stock fell at the open on Thursday as investors worried about the fate of legislation to bail out troubled U.S automakers and signs the labor market was deteriorating as the recession worsens. REUTERS/Brendan McDermid Reuters/Brendan McDermid

* In US economic data, the ISM services index rose from 57.1 to 59.3 in November, above forecasts for a result near 57.5. The ADP survey showed that 208,000 jobs were created in November, just short of expectations for 221,000 job growth. The mortgage market index fell by 7.3% in the latest week, dragged down by a fall in refinancing.

* The latest Federal Reserve Beige Book said that employment gains were widespread with some districts reporting difficulty in filling jobs in a number of sectors; price and wage inflation was subdued; and manufacturing activity strengthened.

* European shares generally rose on Wednesday on hopes that the European Central Bank would inject more stimulus into the economy on Thursday. The FTSEurofirst 300 index rose by 0.5% and the German Dax rose by 0.4%. But the UK FTSE eased by 0.4%. In London trade shares in BHP Billiton rose by 0.2% while Rio Tinto gained 1.1%.

* US sharemarkets rose modestly on Wednesday. Investors dissected the latest batch of positive economic data but awaited the results from the European Central Bank meeting. At the close of trade, the Dow Jones was up by 33 points or 0.2% with the S&P 500 index up by 0.4% while the Nasdaq was higher by 18.7 points or 0.4%.

* US treasuries were little-changed on Wednesday and traders moved to the sidelines in anticipation of Friday's non-farm payrolls (employment) data. US 2 year yields rose by 2 points to 0.56% while US 10 year yields fell 1 point to 2.284%.

* Major currencies were mixed against the greenback in European and US trade on Wednesday. The Euro fell from highs near US$1.2385 to near US$1.2310 and was around the lows in late US trade. The Aussie dollar rose from lows near US83.90c to around US84.40c and was around US84.00c in late US trade. And the Japanese yen eased from 119.10 yen per US dollar to JPY119.83 and was near JPY119.81 in late US trade.

* World oil prices were mixed on Wednesday. US crude stocks fell by 3.7 million barrels last week, above expectations of a 1.3 million build in stocks. Traders await the European Central Bank meeting and US jobs data. In an interview, the Exxon Mobil chief executive said that the company had tested its investments in shale oil for prices between US$40-120 a barrel. Brent crude fell by US62c or 0.9% to US$69.92 a barrel. The US Nymex crude price rose by US50c or 0.7% to US$67.38 a barrel.

* Base metal prices were mixed on the London Metal Exchange on Wednesday. Aluminium lost 0.8% and copper fell by 0.6% but nickel rose by 1.6%. Gold rose on Wednesday with Comex gold futures up by US$9.30 an ounce or 0.8% to US$1,208.70 per ounce. Iron ore fell by US20c to US$69.50 a tonne on Wednesday.

Ahead: In Australia, retail trade and international trade data are released. The European Central Bank meets. In the US, data on weekly claims for unemployment insurance is released with the Challenger job layoff series.

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