Australian Stock Market Report – Morning October 8, 2014

Unemployment — Toyota representative Brandi Hall (L) assists a U.S. military veteran applicant at a hiring fair for veteran job seekers in Washington in this file photo taken April 9, 2014. The number of Americans filing new claims for unemployment benefits unexpectedly rose last week, but not enough to change views the labor market was strengthening. REUTERS/Gary Cameron/Files (UNITED STATES - Tags: MILITARY BUSINESS EMPLOYMENT)

* In US economic data, the JOLTS index of job openings rose from 4.67 million to a 13-year high of 4.835 million in August. The IBD economic optimism index was unchanged at 45.2 in October. And chain store sales in the latest week were up 5.4% on a year ago, up from the 4.3% annual gain in the previous week.

* The International Monetary Fund has trimmed global growth forecasts, tipping 3.3% growth in 2014 (down 0.1 percentage points) and 3.8% growth in 2015 (down 0.2pp).

* European shares slumped on Tuesday with investors fretting about the health of the German economy. German industrial production fell by 4% in August, the biggest fall in over five years. The FTSEurofirst 300 index fell by 1.5% while the UK FTSE lost 1.0% and the German Dax fell by 1.3%. But Australia's major miners were mixed in London trade with shares in BHP Billiton down by 0.4% while Rio Tinto gained 0.8%.

* US sharemarkets fell sharply at the open of trade following a weak European session and shares fell further as the day progressed. The Dow Jones lost 272 points or 1.6% with the S&P 500 index down by 1.5% while the Nasdaq eased by almost 70 points or 1.6%.

* US long-term treasury prices rose on Tuesday (yields lower) in response to the downward revision in global growth forecasts and weaker sharemarkets. US Treasury sold $27 billion in three-year notes on Tuesday and will sell $21 billion in 10-year notes on Wednesday and $13 billion in 30-year bonds on Thursday. US 2 year yields fell by 4 points to 0.508% while US 10 year yields fell by 8 points to 2.343%.

* Major currencies lifted further against the greenback over European and US sessions on Tuesday. The Euro rose from lows near US$1.2585 to highs near US$1.2680, ending US trade near US$1.2665. The Aussie dollar rose from lows near US87.55c to highs around US88.30c, ending the US session near US88.15c. And the Japanese yen firmed from 108.95 yen per US dollar to JPY107.82, ending US trade near JPY107.97.

* World oil prices fell on Tuesday with investors focussed on the downward revision to global growth forecasts and the implications for oil demand. Brent crude fell by US68c or 0.7% to US$92.11 a barrel while the US Nymex crude price fell by US$1.49 or 1.6% a barrel to US$88.85 a barrel.

* Base metal prices were mixed on Tuesday. Nickel was up the most, gaining 1.5%, but tin lost 0.8%. Gold lifted in response to a softer greenback with the Comex gold futures quote up by US$5.10 an ounce or 0.4% to US$1,212.40 per ounce. Iron ore was up by US$1.10 on Tuesday or 1.3% to US$80.00 a tonne.

Ahead: In Australia, the Reserve Bank Chart Pack is issued. In China, the HSBC services index is released at 12.45pm AEDT. In the US, the weekly mortgage market index is released.

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