Australian Stock Market Report – Morning November 4, 2014

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

* In the US, the ISM manufacturing index rose from 56.6 to 59.0 in October, above forecasts for a result near 56.2. Construction spending fell by 0.4% in September, whereas economists had tipped a 0.7% gain. And the six largest automakers in the US have reported October sales that were up 6% on a year ago.

* European shares fell on Monday with investors disappointed by purchasing manager index readings. The Eurozone PMI rose only modestly from 50.3 to 50.6 in October. But airline stocks rose, boosted by a stronger profit forecast from Ryan Air. The FTSEurofirst 300 index fell by 0.8%, the UK FTSE lost 0.9% and the German Dax fell by 0.8%. In London trade shares in BHP Billiton were flat with Rio Tinto down 0.1%.

* US sharemarkets ended mixed in quiet trade on Monday. Positive economic data encouraged investors but lower oil prices weighed on the energy sector. The Dow Jones was up 20 points at one stage and down 51 points at another stage and ended lower by 24 points or 0.1%. The S&P 500 index was down by less than 0.1% while the Nasdaq was up by 8 points or 0.2%.

* US treasury prices eased modestly on Monday (yields higher) in response to generally stronger economic data and steady equities markets. US 2 year yields were up by 1 point to 0.513% while US 10 year yields were up 1 point to 2.346%.

* Major currencies generally eased against the US dollar in European and US trade on Monday. The Euro eased from highs near US$1.2510 to lows near US$1.2470, and was near US$1.2490 in late US trade. The Aussie dollar fell from highs near US87.50c to lows near US86.75c, and was near US86.85c in late US trade. The Japanese yen weakened from 112.54 yen per US dollar to JPY114.18 and was near JPY113.80 in late US trade.

* World oil prices were weaker on Monday due to "technical selling". A stronger greenback made it more expensive for oil buyers in Europe and Asia. But state-backed Saudi Arabian firm, Saudi Aramco, announced price increases for Asian and European buyers in December while cutting prices to US buyers. Brent crude fell by US$1.08 or 1.3% to US$84.78 a barrel while the US Nymex crude price fell by US$1.76 or 2.2% to US$78.78 a barrel. Nymex fell further to US$78.25 in after hours trade.

* Base metal prices rose by up to 1.0% on the London Metal Exchange on Monday with lead the strongest. But zinc lost 0.3% while nickel fell 0.2%. Gold eased to fresh 4-year lows on Monday with Comex gold futures down by US$1.80 an ounce or 0.2% to US$1,169.80 per ounce. Iron ore fell by US70c on Monday or 0.9% to US$77.80 a tonne.

Ahead: In Australia, retail trade, international trade and tourist arrivals data are released and the Reserve Bank Board meets. In the US, weekly data on chain store sales is issued with durable goods orders and international trade. Mid-term elections are held in the US.

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