Australian Stock Market Report – Morning January 9, 2015

* In US economic data, new claims for unemployment insurance (jobless claims) fell by 4,000 in the latest week to 294,000. And the number of announced job layoffs (Challenger survey) fell from 35,940 to 32,640 in December.

* European Central Bank chief, Mario Draghi, said in a letter that "the Governing Council is unanimous in its commitment to using additional unconventional instruments within its mandate" and that this "may entail the purchase of a variety of assets one of which could be sovereign bonds".

* European shares rose on Thursday. Investors were encouraged that the US Federal Reserve wasn't in a rush to lift rates and that the ECB was set to provide stimulus. Further, a report of strong Christmas sales at UK retailer, Tesco, boosted other consumer-focused stocks. The FTSEurofirst 300 index rose by 2.9% with the

German Dax up by 3.4% and the UK FTSE rose by 2.3%. In London trade shares in BHP Billiton rose by 3.4% while Rio Tinto gained 2.2%.

* US sharemarkets posted strong gains in Thursday in line with European markets. While investors awaited the key monthly jobs data, investors concluded from the Federal Reserve minutes that the Fed would be "patient" with its decision on whether to lift rates in 2015. At the close of trade the Dow Jones was up by 323 points or 1.8% with the S&P 500 index up by 1.8% and the Nasdaq was up by almost 86 points or 1.8%.

* US longer-term treasuries fell again on Thursday (yields higher) as investors continue to shift back from Treasuries to equities. US 2 year yields fell 2 points to 0.605% while US 10 year yields rose by 4pts to 2.01%.

* Major currencies drifted against the greenback in European and US trade on Thursday as investors awaited US jobs data. The Euro held between US$1.1755 and US$1.1825, and was around US$1.1790 in afternoon US trade. The Aussie dollar rose from US80.90c to near US81.30c was trading near US81.10c in afternoon

US trade. And the Japanese yen lifted from 119.94 yen per US dollar to JPY119.40 before settling near JPY119.63 in afternoon US trade.

* World oil prices steadied on Thursday. Traders debated the level where oil prices would settle after the 50% decline since mid 2014 and they also awaited market-moving US jobs data. Brent crude fell by US19c or 0.4% to US$50.96 a barrel while the US Nymex crude price rose by US14c or 0.3% to US$48.79 a barrel

* Base metal prices were higher by up to 2.8% on the London Metal Exchange on Thursday. Aluminium led the gains with zinc up 1.2% and the only laggard was copper (down 0.1%). Gold fell modestly on Thursday with the Comex gold futures price down by US$2.20 an ounce or 0.2% to US$1,208.50 per ounce. Iron ore fell by US30c to US$70.60 a tonne on Thursday.

Ahead: In Australia, retail trade data is released. In the US, the nonfarm payrolls data (employment) is released.

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