Australian Stock Market Report – Morning October 23, 2014

Manufacturing — A worker lines up the motherboard as he assembles a 32-inch TV at Element Electronics in Winnsboro, South Carolina May 29, 2014. When Walmart pledged last year to buy an extra $250 billion in U.S.-made goods over the next decade, it appeared to be just what was needed to help move America's putative manufacturing renaissance from rhetoric to reality. The company says consumers can now buy everything from U.S.-made flat-screen TVs, light bulbs and towels and curtains in its stores and on its website. The flat-screen TVs, made in Winnsboro, South Carolina by Element Electronics, may be the campaign�s biggest surprise to date. Today, Element�s 315,000-square-foot plant in South Carolina has six assembly lines making 32- and 40-inch TVs that are now available in all of Walmart's more than 4,000 U.S. Stores. The switch has led to significant savings in ocean freight charges and customs duties on finished goods - though like so many companies involved in the initiative Element has had difficulty finding domestic suppliers. To match Feature WALMART-RESHORING/ Picture taken May 29, 2014. REUTERS/Chris Keane (UNITED STATES - Tags: BUSINESS EMPLOYMENT)

* US economic data, the Consumer Price Index rose by 0.1% in September while the core index (excludes food and energy) also rose by 0.1%. Prices are up 1.7% on a year ago. The mortgage market index soared by 11.6% with the refinancing index up 23.3% in the latest week.

* European shares rose on Wednesday with investors encouraged by positive corporate earnings and a mild reading on inflation in the US. However, British American Tobacco lost 2.6% and Heineken lost 1% after reporting weaker tobacco and beer sales respectively. The FTSEurofirst 300 index rose by 0.7% while the UK market rose by 0.4% and the German Dax lifted by 0.6%. But Australia's major miners were weaker in London trade with shares in BHP Billiton down by 1.5% while Rio Tinto lost 1.6%.

* US sharemarkets rose modestly in early trade but then fell over the day on news of a shooting at the Canadian parliament in Ottawa. Shares in Yahoo and Broadcom rose in response to positive earnings results. The Dow Jones closed near the lows of the day, down by almost 154 points or 0.9 per cent with the S&P 500 index down by 0.7% while the Nasdaq lost 37 points or 0.8%.

* US treasury prices were little changed on Wednesday as investors digested good corporate earnings, mild inflation data and falls on US equities markets. US 2 year yields were down 1 point to 0.366% while US 10 year yields were steady at 2.22%.

* Major currencies eased against the greenback over the European and US sessions on Wednesday. The Euro fell from highs near US$1.2740 to lows near US$1.2635, ending US trade near US$1.2645. The Aussie dollar held between US87.65c and US88.15c ending the US session near US87.75c. And the Japanese yen weakened from 106.78 yen per US dollar to JPY107.37, ending US trade near JPY107.14.

* World oil prices fell sharply on Wednesday after US data showed a sharp 7.11 million barrels lift in crude oil stockpiles in the latest week. Analysts had tipped a more modest 2.7 million barrel increase in inventories. Brent crude fell by US$1.51 or 1.8% to US$84.71 a barrel while the US Nymex crude price fell by US$1.97 or 2.4% to US$80.52 a barrel.

* Base metal prices were mostly higher on the London Metal Exchange on Wednesday, with the exception of copper (down 0.4%) and nickel (down 0.6%). Zinc (up 2.3%) and aluminium (up 1.3%) led the gains. Gold fell on Wednesday with the Comex gold futures quote down by US$6.20 an ounce or 0.5% to US$1,251.70 per ounce. Iron ore was unchanged at US$81.50 a tonne.

Ahead: In Australia, the Reserve Bank Governor delivers a speech on payment system issues. In the US, the FHFA home price index is released with the "flash" manufacturing index. In China, the "flash" manufacturing index is released.

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