Australian Stock Market Report – Morning July 15, 2014

Pedestrians walk past the facade of a Citibank building in New York July 14, 2014. REUTERS/Lucas Jackson (UNITED STATES - Tags: BUSINESS LOGO SOCIETY)

Morning Report
(06:10 AEST)

European shares rose on Monday. Shares in Citigroup rose after releasing solid earnings figures. And fears about the health of the Portuguese banking system continued to ease. The FTSEurofirst 300 index rose by 0.8% with the German Dax higher by 1.2% while the UK FTSE gained 0.8%. Australia´s major miners were higher in London trade with shares in BHP Billiton up by 1.6% while Rio Tinto lifted by 1.2%.

US sharemarkets rose on Monday with investors encouraged by Citigroup earnings. Citigroup will also pay the US government US$7 billion to settle a federal investigation into mortgages sold ahead of the global financial crisis, less than the $12 billion sought by the government. Shares in Citigroup rose by 3%. The Dow Jones rose sharply at the start of trade before drifting sideways over the session. The Dow Jones index rose by almost 112 points or 0.7% with the S&P 500 index higher by 0.5% while the Nasdaq lifted by 25 points or 0.6%.

US treasury prices fell slightly on Monday (yields higher) as investors drifted away from safe-haven assets to equities. But investors also displayed some caution ahead of testimony by the Federal Reserve chair, Janet Yellen. US 2 year yields were steady near 0.46% while US 10 year yields rose by 2 points to 2.545%.

Major currencies were mixed against the US dollar in the European and US sessions on Monday. The Euro fell from lows near U$1.3595 to highs near US$1.3635, closing US trade near US$1.3620. The Aussie dollar eased from highs near US94.05c to lows near US93.83c before ending the US session near US93.95c. And the Japanese yen eased from 101.37 yen per US dollar to JPY101.61, ending US trade near JPY101.55.

World oil prices rose slightly on Monday. While there was renewed violence in Libya that could further serve to delay oil shipments, traders concluded that the market is well supplied with oil at present. Brent crude rose by US32c or 0.3% to US$106.98 a barrel and the US Nymex price rose by US8c a barrel or 0.1% to US$100.91 a barrel.

Base metal prices were reasonably steady on Monday with gains or losses not exceeding 0.7%. Copper was down 0.7% while tin rose by 0.3%. Gold prices fell sharply on reduced economic and geopolitical risks. Trading was 60% above the 30-day daily average. India also indicated that it will retain a 10% tax on gold and silver imports. The Comex gold futures quote fell by US$30.70 or 2.3% to US$1,306.70 per ounce. Iron ore was up US$1.00 a tonne to US$97.90 a tonne on Monday.

Ahead: In Australia, new car sales figures are released. The Reserve Bank releases minutes of the last Board meeting. In the US, the Federal Reserve chair, Janet Yellen, starts testimony to Congress. Retail sales data is released together with import and export prices, weekly chain store sales and the New York Federal Reserve manufacturing survey. In China lending data is expected together with foreign direct investment

[Kick off your trading day with our newsletter]