Australian Stock Market Report – Morning November 3, 2014

U.S. one-hundred dollar bills are seen in this photo illustration at a bank in Seoul August 2, 2013. Picture taken August 2, 2013. Reuters

* In the US, personal income rose by 0.2% in September with spending down by 0.2%. Both results were slightly weaker than expected. The final reading on consumer sentiment in October was 86.9, up from 84.6 and at a 7-year high.

* The Bank of Japan announced it will buy 80 trillion yen of government bonds each year, up from 60-70 trillion yen.

* The Chinese manufacturing purchasing managers index eased from 51.1 to 50.8 in October.

* European shares posted solid gains with investors encouraged by extraordinary measures taken by Japanese authorities to boost economic growth. The FTSEurofirst 300 index rose by 1.8%, the UK FTSE rose by 1.3% and the German Dax gained 2.3%. In London trade shares in BHP Billiton fell 0.3% with Rio Tinto up 0.8%.

* US sharemarkets rose sharply on Friday with the Dow Jones and S&P 500 indexes at record highs. Investors were encouraged by the Bank of Japan's move to purchase more assets. The Dow Jones rose by 195 points or 1.1% with the S&P 500 index up by 1.2% while the Nasdaq rose by 64.6 points or 1.4%. Over the week the Dow Jones rose by 3.4%, the S&P 500 index was up by 2.7% and the Nasdaq rose by 3.3%.

* US treasury prices eased modestly on Friday (yields higher) as equities markets rose to record highs and Japan unveiled monetary stimulus measures. US 2 year yields were up by 1 point to 0.497% while US 10 year yields were up by 3 points to 2.335%. Over the week US 2 year yields rose by almost 11 points and US 10 year yields rose by over 7 points.

* Major currencies fell against the US dollar in Europe and the US on Friday. The Euro eased from highs near US$1.2590 to lows near US$1.2490, ending US trade near US$1.2525. The Aussie dollar fell from highs near US88.45c to highs near US87.60c before ending the US session near US88.00c. The Aussie is near US87.45c today. The Japanese yen slumped from 109.27 yen per US dollar to JPY112.50, ending US trade near JPY112.28.

* World oil prices fell on Friday as monetary stimulus in Japan boosted the US dollar, making it more expensive for commodity buyers in Europe and Asia. Brent crude fell by US38c to US$85.86 a barrel while the US Nymex crude price fell by US58c or 0.7% to US$80.54 a barrel. Over the week Brent fell by US27 cents while Nymex crude lost US47c.

* Base metal prices rose by up to 0.6% on the London Metal Exchange on Friday. But tin fell 2.1% and copper lost 0.7%. Over the week prices rose up to 5.2%. Gold slumped to 4-year lows on Friday on Japan's stimulus measures. Comex gold futures fell by US$27 an ounce or 2.3% to US$1,171.60 per ounce. Over the week gold lost US$60.20 or 4.9%. Iron ore fell US50c on Friday or 0.6% to US$78.50 a tonne and lost US$1.30 over the week.

Ahead: In Australia, data on home prices, job ads and the inflation gauge are released. In the US, car sales, the ISM manufacturing index and construction spending are released. In China the HSBC purchasing managers index is issued.

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