Australian Stock Market Report – Morning November 6, 2014

Global Stock Market Indices — A pedestrian, holding his mobile phone, walks past an electronic board showing the stock market indices of various countries outside a brokerage in Tokyo August 6, 2014. Reuters/Yuya Shino

* In the US, the ISM services index fell from 58.6 to 57.1 in October, short of estimates near 58.0. The ADP survey of private employment showed that 230,000 jobs were created in October, above estimates near 220,000. And weekly home loan commitments fell 2.6% in the latest week with new purchases up 2.6% while refinancing fell 5.5%.

* European shares rose on Wednesday, boosted by company profits results. Traders will be watching the European Central Bank meeting on Thursday for news of fresh stimulus measures. The FTSEurofirst 300 index rose by 1.7%, the UK FTSE gained 1.3% and the German Dax lifted by 1.6%. In London trade shares in BHP Billiton were up 0.6% with Rio Tinto up 1.1%.

* US blue chip shares rose on Wednesday with the Dow Jones and S&P 500 indexes at record highs. There was relief that the uncertainty of mid-term elections was out of the way with Republicans winning control of Congress as expected. But tech stocks eased. At the close of trade the Dow Jones was up by just over 100 points or 0.6% and near the highest levels in the session. The S&P 500 index was up by 0.6% to record highs while the Nasdaq was lower by 3 points or 0.1%.

* US long-term treasury prices were steady on Wednesday. Equities markets were stronger and the ADP employment index rose but traders remain cautious ahead of the official jobs data on Friday. US 2 year yields were flat near 0.522% while US 10 year yields were steady at 2.34%.

* Major currencies were weaker against the US dollar in European and US trade on Wednesday. The Euro fell from highs near US$1.2560 to lows near US$1.2460, and was near US$1.2485 in late US trade. The Aussie dollar fell from highs near US87.35c to a 4-year low around US85.60c, and was near US85.90c in late US trade. The Japanese yen eased from 113.90 yen per US dollar to JPY114.82 and was near JPY114.71 in late US trade.

* World oil prices lifted from multi-year lows on Wednesday. While the US dollar was firmer, weekly US crude stocks rose by less than expected and there were reports of a pipeline blast in Saudi Arabia. The fire at the Saudi pipeline has been extinguished. Brent crude rose from 4-year lows, up by US13c or 0.2% to US$82.95 a barrel. US Nymex crude price rose from 3-year lows, up by US$1.49 or 1.9% to US$78.68 a barrel.

* Base metal prices were mixed on the London Metal Exchange on Wednesday. Tin and nickel rose up to 0.4%; zinc and lead rose up to 1.4%; but copper and aluminium flat. Gold slumped to fresh 4-year lows on Wednesday with Comex gold futures down by US$22.00 an ounce or 1.9% to US$1,145.70 per ounce. Iron ore fell by US$1.10 on Wednesday or 1.4% to a 5-year low of US$76.00 a tonne.

Ahead: In Australia, monthly employment data is released together with new car sales figures. In the US, data on weekly claims for unemployment insurance is released with Challenger job layoffs and labour cost/productivity estimates.

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