Australian Stock Market Report – Morning October 10, 2014

Traders work on the floor of the New York Stock Exchange July 17, 2014. U.S. stocks fell sharply lower on Thursday, with the S

* In the US, new claims for unemployment insurance fell by 1,000 in the latest week to 287,000, below forecasts for a result near 294,000. Wholesale sales fell 0.7% in August (forecast +0.7%) while inventories rose by 0.3% (forecast 0.3% gain).

* European shares eased on Thursday as investors digested falling oil prices, weaker global economic growth, fears on the Ebola virus and uncertainty about when the Federal Reserve was likely to lift interest rates. Leading German economic institutes have reduced growth forecasts, tipping the German economy to grow by 1.3% in 2014 and 1.2% in 2015. The FTSEurofirst 300 index fell by 0.4% while the UK FTSE lost 0.8% and the German Dax rose by 0.1%. And Australia's major miners were firmer in London trade with shares in BHP Billiton up by 0.5% while Rio Tinto lifted by 2.1%.

* US sharemarkets slumped on Thursday on continued uncertainty about the future path of interest rates. Lower oil prices weighed on energy stocks while investors worried about the German economy and potential spread of the Ebola virus. After being down 345 points, the Dow Jones closed lower by 335 points or 2.0% with the S&P 500 index down by 2.1% while the Nasdaq lost 90 points or 2.0%.

* US treasury prices were little changed on Thursday despite large declines on US equity markets. US Treasury sold $13 billion in 30-year bonds on Thursday. US 2 year yields were down 1 point to 0.452% while US 10 year yields were up 1 point to 2.336%.

* Major currencies were generally softer against the greenback over European and US sessions on Thursday. The Euro fell from highs near US$1.2790 to lows near US$1.2665, ending US trade near US$1.2685. The Aussie dollar fell highs near US88.95c to lows around US87.60c, ending the US sessionnear US87.85c. And the Japanese yen held between 107.50 yen per US dollar and JPY108.16, ending US trade near JPY107.88.

* World oil prices slumped again on Thursday as investors fretted about softening European economic growth in the face of plentiful global supplies of crude. Data showed that German exports fell by 5.8% in August, the biggest fall in over 5 years. Brent crude fell to a 27-month low, down by US$1.33 or 1.5% to US$90.05 a barrel while the US Nymex crude price fell by US$1.54 or 1.8% a barrel to US$85.77 a barrel.

* Base metal prices rose by up to 1.3% on Thursday with copper leading the way although tin rose by only 0.2%. Gold rose with the Comex gold futures quote up by US$19.30 an ounce or 1.6% to US$1,225.30 per ounce. Iron ore was down by US30c on Thursday or 0.4% to US$79.50 a tonne.

Ahead: In Australia, housing finance data is released. In the US, data on import and export prices are released.

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