Australian Stock Market Report – Morning December 9, 2014

The logos of French National Agency for Employment (Pole Emploi) and it's German counterpart agency are seen on the door of the joint German-French job center office in Kehl, Germany, on the French-German border near Strasbourg, November 13, 2014. The center, the first of its kind, joining French and German Employment Agencies, was inaugurated in February 2013 and is due to facilitate the search for jobs for German and French unemployed persons in both countries. REUTERS/Vincent Kessler (GERMANY - Tags: POLITICS BUSINESS EMPLOYMENT)

* In US economic data, the employment trends index rose from 122.8 to 123.24 in November.

* European shares fell on Monday with a credit downgrade for Italy weighing on sentiment. S&P downgraded Italy from BBB to BBB-, one notch above junk. Economic data in China and Japan was also soft while lower oil prices weighed on the energy sector. The FTSEurofirst 300 index was down by 0.7% with the German Dax lower by 0.7% while the UK lost 1.1%. In London trade shares in BHP Billiton fell by 2.5% while Rio Tinto eased 0.5%.

* US sharemarkets fell on Monday with investors choosing to book profits in response to soft economic data out of China and Japan. And lower oil prices weighed on the energy sector. With just over an hour of trade to go, the Dow Jones was lower by almost 86 points or 0.5%, after being down 153 points. The S&P 500 index was down by 0.6% while the Nasdaq eased by 38 points or 0.8%.

* US long-term treasuries rose on Monday (yields lower). The US sharemarket was lower, driving some buying from bargain hunters. The expectation is that lower oil prices will restrain inflation, while economic data in the US and Japan was soft. US 2 year yields were flat near 0.64% while US 10 year yields fell by 5 points to 2.26%.

* Major currencies were generally firmer against the greenback in European and US trade on Monday. The Euro lifted from lows near US$1.2250 to around US$1.2335 and was near US$1.2320 in late US trade. The Aussie dollar rose from lows near US82.60c to around US83.15c and was around US82.95c in late US trade. And the Japanese yen strengthened from 121.51 yen per US dollar to JPY120.33 and was near JPY120.49 in late US trade.

* World oil prices fell again on Monday on expectation that any recovery in prices is some way off. Reuters reported the chief executive of Kuwait's national oil company as saying that oil prices were likely to remain around $65 a barrel for the next six to seven months. Brent crude fell by US$2.88 or 4.2% to US$66.19 a barrel. US Nymex crude price fell by US$2.79 or 4.2% to US$63.05 a barrel.

* Base metal prices fell by up to 1.4% on the London Metal Exchange on Monday with aluminium leading the declines. But lead fell by just 0.2% while tin bucked the trend, rising by 1.3%. Gold rose on Monday in response to a weaker greenback and safe-haven buying. The Comex gold futures price was up by US$4.50 an ounce or 0.4% to US$1,194.90 per ounce. Iron ore fell by US$1.20 to US$69.70 a tonne on Monday.

Ahead: In Australia the NAB business survey is released together with weekly consumer sentiment data. In the US, wholesale sales/inventories data is due with JOLTS job openings and weekly chain store sales data.

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