Australian Stock Market Report – Morning July 23, 2014

A worker walks in front of buildings at a government housing development in Caracas July 21, 2014. REUTERS/Carlos Garcia Rawlins (VENEZUELA - Tags: POLITICS BUSINESS EMPLOYMENT CONSTRUCTION REAL ESTATE TPX IMAGES OF THE DAY)

Morning Report
(06:15 AEST)

In US economic data existing home sales rose for the third consecutive month in June, up 2.6% to an annual rate of 5.04 million - an eight month high. The Consumer Price Index rose 0.3% in June to be up 2.1% over the year. Gasoline accounted for two-thirds of the gain lifting by 3.3% in June. Stripping out food & energy prices, core CPI rose by a tame 0.1% in June to be up 1.9% on year ago.

European shares rebounded on Tuesday driven by strong earnings reports. Cooperation between Russia and Ukraine over the MH17 plane crash site also helped sentiment. The FTSEurofirst 300 index rose by 1.3%, with the German Dax up by 1.3%, while the UK FTSE rose 1%. Australia´s major miners were mixed in London trade with shares in BHP Billiton up by 2.1% while Rio Tinto rose 1.4%.

US sharemarkets rose on Tuesday as tame inflation data and upbeat housing figures supported sentiment. Home builders lifted with the sector up 1%. Chipotle Mexican Grill jumped 12.3% a day after reporting a 26% jump in quarterly profit. Traders waited onApple which reports earnings after the bell. The Dow Jones index rose by 62 points or 0.4%. The S&P 500 index gained 0.5% while the Nasdaq rose by 31 points or 0.7%.

US treasury prices were mixed on Tuesday with traders hopeful that tensions in the Middle East and Ukraine will ease. US 2 year yields fell by 2pts to 0.48% while US 10 year yields were flat at 2.47%.

Major currencies were mixed against the US dollar following European and US sessions on Tuesday. The Euro fell from highs near US$1.3525 to around US$1.3465, before ending US trade near US$1.3470. The Aussie dollar rose from lows near US93.80c to highs near US94.20c before ending the US session near US93.90c. And the Japanese yen traded between 101.60 yen per US dollar and JPY101.35, ending US trade near JPY101.45.

World oil prices eased on Tuesday although trading was choppy. Fears of possible disruptions to global oil supplies from geopolitical tensions in Eastern Europe and the Middle East continued to dominate trade. European Union foreign ministers considered new sanctions against Russia the world's second largest oil exporter. Brent crude fell by US31c or 0.3% to US$107.37 a barrel and the US Nymex price fell by US17c a barrel or 0.2% to US$104.42 a barrel.

Base metal prices rose by up to 1.5% on Tuesday with the exception of Tin (down 0.5%). Nickel, aluminium and zinc leading the way. Gold prices fell on Tuesday in response to geopolitical tensions with the Comex gold futures quote down by US$7.60 or 0.6% to US$1,306.30 per ounce. Iron ore fell by US60c on Tuesday or 0.6% to US$95.40 a tonne.