Australian Stock Market Report – Morning July 2, 2014

Car manufacturing — A worker assembles a car at a Nissan's manufacturing plant in Rosslyn, outside Pretoria, September 11, 2009. Reuters/Siphiwe Sibeko

A worker assembles a car at a Nissan's manufacturing plant in Rosslyn, outside Pretoria, September 11, 2009. REUTERS/Siphiwe Sibeko

Morning Report
(6:15 AEST)

In US economic data, the ISM manufacturing index eased from 55.4 to 55.3 in June. A figure above 50 indicates expansion. The sub index of new orders hit a six-month high, a good sign for business capital spending. On a negative note export orders were weaker. The Markit US Manufacturing PMI rose to 57.3 in June - the highest since May 2010. US construction spending rose by a lower than expected 0.1% in May.

European shares recorded a healthy start to the new quarter on Tuesday. BNP Paribas rose 3.6% on a relief rally, after news it had settled US sanctions case and reassured investors of its 2015 earnings guidance. Volume on the stock was twice its 90-day average. Mining shares rallied after encouraging economic data came out of China. The STOXX 600 resources index rose 2.6%. The FTSEurofirst 300 index rose by 0.9%, the German Dax gained 0.7% while the UK FTSE rose 0.9%. Australia´s major miners finished higher in London trade with shares in BHP Billiton up by 2.9% while Rio Tinto rose by 3.0%.

US sharemarkets rose on Tuesday, with the S&P500 hitting fresh record highs and the Dow flirting with 17,000 points. Twitter shares jumped 3.6% after announcing a new CFO. The Dow Jones rose by 129 points or 0.8% with the S&P 500 index up 13 points or 0.7% and the Nasdaq rose by 50 points or 1.1%.

US treasury prices rose on Tuesday (yields higher), after traders reacted to the strong Chinese and US manufacturing data. US 2 year yields rose 1 point to 0.47% while US 10 year yields rose by 3 points at 2.57%.

Major currencies were mixed against the US dollar on Tuesday. The Euro hit highs near U$1.3695 before easing to lows near US$1.3675, closing US trade near its lows. The Aussie dollar lifted from lows near US94.40c to highs near US95.05c and ended US trade near US94.95c. And the Japanese yen traded in a tight range between 101.40 yen per US dollar to JPY101.60, ending US trade near JPY101.50.

World oil prices eased on Tuesday on easing concerns about potential supply disruptions from Iraq. Brent crude fell by US16c or 0.1% to US$112.29 a barrel. While the US Nymex price closed lower by US3c or to US$105.34 a barrel.

Base metal prices were mixed on the London Metal Exchange on Tuesday. Zinc fell by 1.6% while tin lifted by 1.1%. The Comex gold futures quote rose by US$4.60 an ounce or 0.3% to US$1,326.60 per ounce. Iron ore rose by US40c a tonne or 0.4% to US$94.20 a tonne.

Ahead: In Australia, trade data is released. RBA Assistant Governor Debelle speaks in London. In the US, factory orders are released.

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