Australian Stock Market Report – Morning January 14, 2015

Britain's Chancellor of the Exchequer George Osborne (L) examines a children's toy at market stalls promoting the livelihoods of small business owners at Downing Street in London, December 5, 2014. REUTERS/Toby Melville (BRITAIN - Tags: BUSINESS POLITICS)

* In US economic data, a survey of small businesses - the NFIB business optimism index - rose from 98.1 to 100.4 in December. The JOLTS job openings index rose from 4.83 million to 4.972m in November. And chain store sales were up by 3.8% in the latest week on a year ago, down from the 4.3% gain in the previous week.

* European shares rose on Tuesday. Investors were encouraged by Chinese trade data and good sales data from retailers. The STOXX Europe retail index rose by 2.9%. Overall the FTSEurofirst 300 index rose by 1.4% with the German Dax up by 1.6% and the UK FTSE was up 0.6%. Also there were gains of 3.3% in Greece and 2.0% in Italy. In London trade shares in BHP Billiton rose by 0.4% while Rio Tinto fell by 0.2%.

* US sharemarkets reversed course in volatile trade on Tuesday. Around 1pm New York time, the S&P 500 fell below its 50-day moving average, dragging key indexes lower. The Dow Jones lost 130 points in 25 minutes. After being up 282 points at the open of trade, the Dow Jones ended trade lower by 27 points or 0.2% (425 point trading range). The S&P 500 index fell by 0.3% and the Nasdaq was down by 3 points or 0.1%.

* US treasuries were firmer on Tuesday (yields lower). There was average demand for a $21 billion auction of 10-year notes. And economic data was generally positive. But equities lost favour over the session compared with treasuries. US 2 year yields fell by 2 points to 0.537% while US 10 year yields fell by 1 point to 1.905%.

* The euro and commodity currencies fell against the greenback in European and US trade on Tuesday. The Euro fell from highs near US$1.1850 to lows near US$1.1755 and was around US$1.1770 in afternoon US trade. The Aussie dollar fell from highs near US81.80c to lows around US81.30c and was near US81.60c in afternoon US trade. But the Japanese yen lifted from 118.80 yen per US dollar to JPY117.53 and was near JPY117.86 in afternoon US trade.

* World oil prices fell to fresh 6-year lows on Tuesday. The United Arab Emirates has defended OPEC's decision not to cut output. Brent crude fell by US84c or 1.8% to US$46.59 a barrel while the US Nymex crude price fell by US18c or 0.4% to US$45.89 a barrel. The differential between Brent and Nymex traded at zero earlier in the session.

* Base metal prices were lower by up to 3.0% on the London Metal Exchange on Tuesday with nickel leading the declines although aluminium did best, down just 0.7%. Gold rose, with the Comex gold futures price up by US$1.60 an ounce or 0.1% to US$1,234.40 per ounce. Iron ore fell by US60c to US$67.90 a tonne on Tuesday.

Ahead: In Australia, lending and job vacancies data are released. In the US, retail sales, import & export prices and weekly mortgage finance data are released.

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