Australian Stock Market Report – Morning November 20, 2014

* In the US, housing starts fell by 2.8% to a 1.009 million annual rate in October. Analysts had tipped a result near 1.025m. But building permits were stronger than expected, up 4.8%. The mortgage market index rose by 5.2% in the latest week. And there were net capital outflows totalling US$55.6m in September.

* Minutes from the US Federal Reserve meeting held on October 28/29 showed members spent time debating the central bank's communication strategy on interest rates and long run goals. Reuters noted that "Among policymakers there was 'widespread agreement' that inflation moderately below 2 percent is just as costly as inflation moderately above that level."

* European shares were mixed on Wednesday ahead of the release of the US Federal Reserve meeting minutes. The FTSEurofirst 300 index was flat with the UK FTSE down by 0.2% while the German Dax rose by 0.2%. In London trade shares in BHP Billiton and Rio Tinto both lost 2.1%.

* US sharemarkets were modestly weaker on Wednesday. Significant snowstorms served to crimp trading volumes while investors dissected latest economic data and Fed minutes. At the close of trade the Dow Jones was down by 2 points or less than 0.1% while the S&P 500 index was down by 0.2% and the Nasdaq was lower by just over 26 points or 0.6%.

* US treasuries eased on Wednesday (yields higher) as investors digested the latest economic data and minutes from the last Federal Reserve meeting. US 2 year yields rose by 1 point to 0.525% while US 10 year yields rose by 4 points to 2.358%.

* The US dollar was mixed against major currencies on Wednesday. The Euro rose from lows near US$1.2515 to highs near US$1.2580, and was around US$1.2545 in late US trade. The Aussie dollar fell from highs near US86.75c to around US86.05c, before edging up to US86.15c in late US trade. The Japanese yen eased from 117.22 yen per US dollar to JPY118.03 and was near the weakest levels in late US trade.

* World oil prices fell in late trade on Wednesday after traders reacted to the Federal Reserve minutes. Oil prices had risen earlier in the day on views by Libya that OPEC will cut production quotas next week. Brent crude fell by US37c or 0.5% to US$78.10 a barrel while the US Nymex crude price fell by US3 cents to US$74.58 a barrel.

* Base metal prices rose on the London Metal Exchange on Wednesday. Nickel rose 3.2% but other metals only lifted up to 0.7%. Gold fell on Wednesday with the Comex gold futures price down by US$3.20 an ounce or 0.3% to US$1,193.90 per ounce. Spot gold fell to US$1,183 an ounce in late trade. Iron ore fell by US$2.10 a tonne or 2.1% to US$70.00 a tonne on Wednesday.

Ahead: In Australia, monthly data on unemployment beneficiaries is released. In China the "flash" manufacturing survey is issued. In the US, data on consumer prices is released with weekly jobless claims, existing homes, the leading index and Philadelphia Federal Reserve index.

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