Australian Stock Market Report – Morning January 2, 2015

* Most global financial markets were closed on Thursday for the New Years Day holiday.

* In Chinese economic data, the National Bureau of Statistics manufacturing purchasing managers index eased from 50.3 to 50.1 in December. The NBS services PMI rose from 53.9 to 54.1 in December.

* In US economic data released on Wednesday, new claims for unemployment insurance rose by 17,000 in the latest week to 298,000 - above expectations centred on a result near 290,000. The Chicago purchasing managers index eased from 60.8 to 58.3 in December. The pending home sales index rose by 0.8% to 104.8 in November.

* European shares rose in thin trade on Wednesday. While German and Italian markets were closed, the FTSEurofirst 300 index rose by 0.4% to end the year up 3.9%. The UK FTSE rose by 0.3% on Wednesday but fell 2.7% over the year. In London trade shares in BHP Billiton lost 0.1% on Wednesday while Rio Tinto rose by 0.2%.

* US sharemarkets eased on Wednesday as investors booked profits at the end of the month, quarter and year. The Dow Jones was down by 160 points or 0.9% with the S&P 500 index down by 1.0% and the Nasdaq lost 41.4 points or 0.9%. Over the year the Dow rose by 7.5%; the S&P 500 index rose by 11.4%; and the Nasdaq rose by 13.4%.

* US treasuries rose on Wednesday (yields lower) as investors drifted from equities to bonds. US 2 year yields fell by 2pts to 0.67% while US 10 year yields fell by 2pts to 2.17%.

* Major currencies eased against the greenback in European and US trade on Wednesday and Asian trade on Thursday. The Euro eased from highs near US$1.2165 to lows near US$1.2095 and is trading at the lows. The Aussie dollar fell from highs near US82.10c to lows near US81.50c and is trading near US81.70c. And the

Japanese yen eased from 119.29 yen per US dollar to JPY119.93 and is currently near JPY119.70.

* World oil prices fell again on Wednesday. Brent crude fell by US57c or 1.0% to US$57.33 a barrel. And the US Nymex crude price fell by US85c or 1.6% to US$57.33 a barrel to end the year down 45%.

* Base metal prices fell by up to 1.7% on the London Metal Exchange on Wednesday. Lead posted the biggest decline but nickel rose 0.5% and tin rose 0.2%. Gold fell on Wednesday with the Comex gold futures price down by US$16.30 an ounce or 1.4% to US$1,184.10 per ounce. Iron ore was unchanged at US$71.20 a

tonne on Wednesday.

Ahead: In Australia, monthly home prices are due. In the US, the ISM manufacturing index is due with construction spending.

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