Australian Stock Market Report – Morning September 11, 2014

* Breaking news, the New Zealand Central Bank kept interest rates on hold at 3.50%. The statement following the no change decision suggested that policymakers were assesing conditions before looking to further rate hikes if necessary. The central bank talked down the NZ dollar saying "The exchange rate has yet to materially adjust to lower commodity prices. Its current levels remain unjustified and unsustainable. We expect a further significant depreciation".

* In US economic data, wholesale inventories lifted by 0.1% in July well below expectations of a 0.5% lift. Wholesale sales lifted by 0.7%. The lower than expected inventory build-up should have a negative impact on US September quarter growth.

* European shares ended flat to weaker on Wednesday on worries over Scotland's vote on independence and growing expectations of a more hawkish stance from the US Federal Reserve. The FTSEurofirst 300 index ended flat with the German Dax down by 0.1% while the UK FTSE was also flat. Australia's major miners were weaker in London trade with shares in BHP Billiton down by 0.5% while Rio Tinto fell by 0.3%.

* US sharemarkets were higher in afternoon trade on Wednesday, helped by a rebound in Apple's stock. Apple shares lifted by 2.5% a day after releasing the iPhone 6 and boosted the Nasdaq and S&P 500. Energy stocks led the declines. The Dow Jones index rose by 55 points or 0.3%. The broader S&P 500 index rose by 0.4% while the Nasdaq rose 34 points or 0.8%.

* US treasury prices fell on Wednesday (yields higher) as investors speculated that the Federal Reserve could decide to lift interest rates earlier than expected. US 2 year yields rose by 1 point to 0.57% while US 10 year yields rose by 3 points to 2.54%.

* Major currencies were weaker against the US dollar over the European and US sessions on Wednesday. The Euro fell from highs near US$1.2960 to around US$1.2890 settling at US$1.2910 at the end of the US session. The Aussie dollar fell from highs near US91.65c to lows near US91.10c before ending the US session near US91.50c. And the Japanese yen held between 106.35 yen per US dollar and JPY106.85, ending US trade near JPY106.80.

* World oil prices fell to a 8-month low of Wednesday as OPEC cuts demand forecasts. Saudi Arabia announced it has cut oil output by 400,000 barrels per day (bpd). OPEC expects a crude supply surplus of more than 1 million bpd in 2015. Brent crude fell by US$1.12 or 1.1% to US$98.04 a barrel with the US Nymex price ending US$1.08 a barrel lower at US$91.67 a barrel.

* Base metal prices were mixed on Wednesday, with copper prices managing to eke out a 0.5% gain although still remaining near a 1-month low. Nickel lost 1% after the run of recent gains. Gold prices fell on Wednesday with the Comex gold futures quote down by US$3.20 an ounce or 0.3% to US$1,245.30 per ounce. The iron ore price fell US$1 or 1.2% to US$82.20 a tonne.

Ahead: In Australia, employment data is released. In the US, no economic data is released. Chinese inflation data is released.

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