Australian Stock Market Report – Morning, October 2, 2014

People walk down stairs in a train station in Tokyo's business district September 30, 2014. Japanese big manufacturers' confidence improved slightly in the three months to September, a closely watched central bank survey showed, but service-sector sentiment worsened, adding to evidence that a sales tax hike continues to weigh on the economy. Picture taken September 30, 2014. To match JAPAN-ECONOMY/TANKAN REUTERS/Yuya Shino (JAPAN - Tags: BUSINESS EMPLOYMENT)

* In US economic data, the ADP national employment index showed that 213,000 private sector jobs were created in September, just above forecasts. Construction spending fell by 0.8% in August, short of forecasts for a 0.5% gain. And the ISM manufacturing index eased from 59.0 to 56.6 in September, short of forecasts for a reading near 58.5.

* European shares fell on Wednesday. Data on manufacturing across the Eurozone was generally disappointing with a contraction in German activity for the first time in 15 months. And two benchmark European companies issued sales warnings. The FTSEurofirst 300 index fell by 0.9% while the German Dax and UK FTSE both lost 1.0%. And Australia's major miners were weaker in London trade with shares in BHP Billiton down by 1.4% while Rio Tinto fell by 0.4%.

* US sharemarkets slumped on Wednesday. Some investors pointed to the confirmed Ebola case in the US, worrying that any lift in the number of cases could affect travel and retail spending. The Dow Jones index fell by 238 points or 1.4% after being down 266 points. The broader S&P 500 index fell by 1.3% while the Nasdaq lost 71 points or 1.6%.

* US long-term treasury prices rose on Wednesday (yields lower) as investors opted for safe-haven assets like government bonds and gold. An easing in US manufacturing activity and news of a confirmed Ebola case affected sentiment. US 2 year yields fell 6 points to 0.52% while US 10 year yields fell by 10 points to 2.39%.

* Major currencies were generally firmer against the greenback over the European and US sessions on Wednesday. The Euro rose from lows near US$1.2585 to highs near US$1.2635, ending US trade near the US$1.2615. The Aussie dollar rose from lows near US86.85c to highs around US87.45c before ending the US session near US87.35c. And the Japanese yen firmed from 109.94 yen per US dollar to JPY108.90, ending US trade near its stongest levels.

* World oil prices eased on Wednesday to fresh 2-year lows. Investors were worried that news of a confirmed Ebola case in the US could affect global travel. Supporting prices was data showing a fall in US crude stockpiles in the latest week. But Saudi Arabia announced cuts in the official sales price of November forward crude oil sales to Asia. Brent crude fell by US51c or 0.5% to US$94.16 a barrel while the US Nymex crude price fell by US43c a barrel or 0.5% to US$90.73 a barrel.

* Base metal prices were generally lower on Wednesday. Aluminium fell by 2.1% while copper and tin bucked the trend, both up 0.1%. Gold prices rose on Wednesday with the Comex gold futures quote up by US$3.90 an ounce or 0.3% to US$1,215.50 per ounce. Iron ore rose by US80c a tonne or 1.0% to US$78.30 a tonne.

Ahead: In Australia, new home sales, international trade and building approvals data are released. In the US, weekly data on unemployment claims is released with factory orders.

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