Australian Stock Market Report – Morning January 16, 2015

US Dollars And Euros Banknotes — US dollars and euros banknotes are seen in this illustration photo taken at a change bureau in Paris, October 28, 2014. Reuters/Philippe Wojazer

* The Swiss National Bank has removed its 3-year old cap of the franc against the Euro, sending the Swiss franc soaring against major currencies.

* In US economic data, producer prices fell by 0.3% in December, but excluding food and energy (core measure), prices rose by 0.3%. Economists had tipped a 0.1% rise in the core measure. The Philadelphia Federal Reserve index eased from +24.3 to +6.3 in January, well short of expectations near +19.9. And new claims for unemployment insurance rose from 297,000 to 316,000 in the latest week, well above forecasts centred on a result near 291,000.

* European shares responded to the surprise Swiss currency decision. The Swiss sharemarket plunged 8.7% - the biggest fall in 25 years. But the FTSEurofirst 300 index rose by 2.9% with the German Dax up by 2.2% and the UK FTSE lifted by 1.7%. In London trade shares in BHP Billiton rose by 4.9% while Rio Tinto gained 1.4%.

* US sharemarkets remained volatile on Thursday. Investors digested the Swiss currency change, movements in oil prices, earnings announcements and economic data. At the close of trade the Dow Jones was lower by 106 points (219 point trading range). The S&P 500 index was down by 0.9% and the Nasdaq lost 68.5 points or 1.5%. After the bell shares in Intel fell by 2.4% after its earnings result.

* US treasuries were firmer on Thursday (yields lower) in response to lower US equity markets and increased demand for safe-haven assets after the Swiss currency decision. US 2 year yields fell by 8 points to 0.428% while US 10 year yields fell by 12 points to 1.74%.

* Major currencies were mixed against the greenback in European and US trade on Thursday. The Euro fell from highs near US$1.1785 to lows near US$1.1575 and was around US$1.1610 in afternoon US trade. The Aussie dollar rose from lows near US81.50c to highs around US82.90c and was near US82.15c in afternoon US trade. And the Japanese yen lifted from 117.93 yen per US dollar to JPY116.26 and was near JPY116.40 in afternoon US trade.

* World oil prices fell on Thursday with weaker US economic data raising worries about demand for crude oil. Brent crude fell by US$1.02 or 2.1% to US$47.67 a barrel while the US Nymex crude price fell by US$2.23 or 4.6% to US$46.25 a barrel.

* Base metal prices were higher by up to 1.5% on the London Metal Exchange on Thursday with zinc leading the gains although tin actually fell by 0.1%. Gold rose, with the Comex gold futures price up by US$30.30 an ounce or 2.5% to US$1,264.80 per ounce. Iron ore rose by US20c to US$68.00 a tonne on Thursday.

[Kick off your trading day with our newsletter]