Australian Stock Market Report – Morning September 10, 2014

Retailer — Shoppers look over items on sale at a Macy's store in New York, November 23, 2012. Reuters/Keith Bedford

* In US economic data, weekly chain store sales were up 4.9% on a year ago according the Redbook survey, an unchanged annual growth result on the previous week.

* Thomson Reuters reported: "Research from Federal Reserve economists published late on Monday showed Fed members expect a higher trajectory for interest rates than investors, boosting bond yields and sending the US dollar to a 14-month high against the euro."

* European shares fell on Tuesday with a higher US dollar in the Asian session putting downward pressure on base metal prices.The FTSEurofirst 300 index fell by 0.4% with the German Dax down by 0.5% while the UK FTSE lost 0.1%. Australia's major miners were mixed in London trade with shares in BHP Billiton down by 1.0% while Rio Tinto rose by 0.2%.

* US sharemarkets ended weaker on Tuesday with analysts debating the major reasons for the declines. Speculation of an earlier-than-expected rate hike weighed on sentiment. And shares in Apple fell after releasing new products including an Apple Watch. Shares in Apple fell by 0.4% after earlier being up more than 4%. The Dow Jones index fell by 97.6 points or 0.6%. The broader S&P 500 index fell by 0.7% while the Nasdaq lost 40 points or 0.9%.

* US treasury prices fell on Tuesday (yields higher) as investors speculated that the Federal Reserve could decide to lift interest rates earlier than expected. US 2 year yields rose by 3 points to 0.56% while US 10 year yields rose by 2 points to 2.50%.

* Major currencies were mixed against the US dollar over the European and US sessions on Tuesday. In the Asian session on Tuesday the Euro fell from highs near US$1.2910 to around US$1.2860. But over the European and US sessions the Euro rose to US$1.2960, settling at US$1.2945 at the end of the US session. The Aussie dollar fell from highs near US92.85c to lows near US91.85c before ending the US session near US92.05c. And the Japanese yen held between 106.04 yen per US dollar and JPY106.47, ending US trade near JPY106.17.

* World oil prices were mixed in volatile trade on Tuesday. Ample global supplies weighed on oil prices and investors had to respond to a volatile US dollar. Brent crude fell by US1.04 or 1.0% to US$99.16 a barrel with the US Nymex price ending US9c a barrel higher at US$92.75 a barrel.

* Base metal prices slumped on Tuesday, falling between 1.6-5.1% with nickel down the most. Gold prices fell on Tuesday with the Comex gold futures quote down by US$5.80 an ounce or 0.5% to US$1,248.50 per ounce. The iron ore price fell US40c or 0.5% to US$83.60 a tonne.

Ahead: In Australia, consumer confidence data is released. In the US, the mortgage market index is released together with wholesale sales and inventories.

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