Australian Stock Market Report – Morning October 14, 2014

The national flag of China flutters behind a fence of the headquarters of the National Development and Reform Commission (NDRC) in Beijing, in this July 12, 2013 file photo. REUTERS/Kim Kyung-Hoon/Files

* In Chinese economic data released yesterday, the trade surplus narrowed from US$49.83 billion to US$31.0 billion in September with exports up 15.3% on a year ago with imports up 7%.

* European shares rose on Monday. Airlines rose in response to the continued fall of crude oil prices and German lender Commerzbank rose 2% on reports that the European Central Bank told the bank it had a favourable outcome to stress test results. The FTSEurofirst 300 index rose by 0.1% while the UK FTSE gained 0.4% and the German Dax lifted by 0.3%. And Australia's major miners were stronger in London trade in line with a higher iron ore price with shares in BHP Billiton up by 2.9% while Rio Tinto gained 4.2%.

* US sharemarkets largely tracked sideways in the morning session before selling off in afternoon trade. Trading volumes were thin with some offices observing the Columbus Day holiday. Investors also remained wary ahead of key earnings results this week. The Dow Jones lost 180 points in the last 45 minutes of trade and ended lower by 223 points or 1.4% with the S&P 500 index down by 1.7% while the Nasdaq lost almost 63 points or 1.5%.

* The US government bond market was closed for the Columbus Day holiday on Monday. Last week US 2 year yields were down 11 points to 0.428% while US 10 year yields were down 14 points to 2.286%.

* Major currencies lifted against the greenback over the afternoon US session on Monday. The Euro held between US$1.2650 and US$1.2700, ending US trade near US$1.2700. The Aussie dollar rose from lows near US87.10c to highs around US87.75c, ending the US session near US87.60c. And the Japanese yen held between 107.07 yen per US dollar to JPY107.55, ending US trade near JPY107.08.

* World oil prices eased again on Monday on fears that OPEC oil producers won't take action to curtail production in the face of plentiful global supplies. OPEC next meets on November 27. According to Reuters, Saudi Arabia has privately told oil market participants it can accept oil prices between $80 and $90 a barrel. Brent crude fell by US$1.32 or 1.5% to US$88.89 a barrel while the US Nymex crude price fell by 8c to US$85.74 a barrel.

* Base metal prices rose by up to 1.2% on Monday with copper leading the gains. But tin bucked the trend, down by 0.2%. Goldrose with the Comex gold futures quote up by US$8.30 an ounce or 0.7% to US$1,230 per ounce. Iron ore was up by US$3.20 or 3.9% to US$83.10 a tonne.

Ahead: In Australia, the NAB business survey is released with the Roy Morgan-ANZ weekly consumer sentiment data. In the US< Ciitgroup, JP Morgan and Intel report quarterly earnings.

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