Australian Stock Market Report – Morning June 25, 2014

Morning Report
6:05 AEST)

In US economic data, new home sales soared by 18.6% in May to a 504,000 annual rate, above forecasts for a result near 440,000. Consumer confidence rose from 83.0 to a 6-1/2 year high of 85.2 in June, above forecasts near 83.5. The Case Shiller measure of home prices rose by 0.2% in April with the annual rate easing from 12.4% to 10.8%. But the Richmond Federal Reserve index eased from +7 to +3 in June.

European shares were mixed on Tuesday as investors weighed takeover news, a weaker German business sentiment index and speculation of tighter UK monetary policy. The German Ifo business index eased from 110.4 to 109.7 in June. The FTSEurofirst 300 index lost 0.1%, the German Dax rose by 0.2% while the UK FTSE eased by 0.2%. Australia´s major miners finished lower in London trade with shares in BHP Billiton down by 0.9% while Rio Tinto lost 1.0%.

US sharemarkets eased on Tuesday as investors began to book profits for the month and quarter. Worries about Iraq and the outlook for interest rates persist but the economic data was generally positive. The Dow Jones fell by 119 points or 0.7% with the S&P 500 index down by 0.6% after earlier hitting record highs. And the Nasdaq lost 18 points and 0.4% after hitting a 14-year high in the session.

US long-term treasury prices were higher (yields fell) as investors took profits in the sharemarket and put some of it to work in the bond market. US Treasury sold $30 billion in two-year notes on Tuesday and will sell $35 billion in five-year notes on Wednesday and $29 billion in seven-year notes on Thursday. US 2 year yields were down 1 point to 0.46% while US 10 year yields fell by 5 points to 2.58%.

Major currencies were mixed against the US dollar in European and US trade on Tuesday. The Euro eased from highs near U$1.3625 to lows near US$1.3585, and closed US trade around US$1.3600. The Aussie dollar eased from highs near US94.25c to lows near US93.70c and ended US trade around session lows. And the Japanese yen eased from 101.83 yen per US dollar and JPY102.16, ending US trade near JPY101.94.

World oil prices were mixed on Tuesday. Brent crude rose by US34c or 0.3% to US$114.46 a barrel in response to supply disruptions in Libya, ongoing violence in Iraq and the expectation of lower US oil inventories in the latest week. The US Nymex closed lower by US14c or 0.1% to US$106.03 a barrel.

Base metal prices were mixed on the London Metal Exchange on Tuesday. Nickel fell by 1.6% and zinc lost 0.5% but other metals rose up to 0.6%. The Comex gold futures quote rose for the fifth straight day, up by US$2.90 an ounce or 0.2% to US$1,321.30 per ounce. Iron ore fell by just US10c a tonne or 0.1% on Tuesday to US$93.30 a tonne.

Ahead: In Australia, the Bureau of Resources & Energy Economics releases latest forecasts. In the US, durable goods orders and revised economic growth figures are released.

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