Australian Stock Market Report – Morning September 12, 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, jobless claims rose by 11,000 to 315,000. The treasury monthly budget statement showed a $129 billion deficit in August, in line with estimates.

* European shares closed near a one-week low on Thursday after the disappointing US employment data. Mining stocks were hit with concerns about China's economic growth following with the weaker Chinese inflation data. The STOXX Europe 600 Basic Resources index fell 0.3%. Confirmation the EU will impose new sanctions against Russia and the likely impact on the Euro zone economy also weighed on stocks. The FTSEurofirst 300 index ended 0.1% lower with the German Dax also down by 0.1% while the UK FTSE lost 0.5%. Australia's major miners were weaker in London trade with shares in BHP Billiton down by 0.7% while Rio Tinto fell by 0.3%.

* US sharemarkets were mixed on Thursday, as the weaker jobless claims data weighed on markets. A lift in financial stocks helped to limit the losses. JP Morgan rose 0.5% while Bank of America gained 1.2%. Small and mid-cap stocks outperformed with the S&P MidCap 400 index lifting 0.4% and the S&P SmallCap 600 index up 0.7%. At the close the Dow Jones index was down by almost 20 points or 0.1%. The broader S&P 500 index rose by 0.1% while the Nasdaq rose 5 points or 0.1%.

* US treasury prices rose for the first time in four days (yields lower) as news of sustained US military involvement in Iraq & Syria plus new sanctions on Russia drove safe-haven demand. US 2 year yields fell by 1 point to 0.56% while US 10 year yields were flat at 2.55%.

* Major currencies were mixed against the US dollar over the European and US sessions on Thursday. The Euro rose from lows near US$1.2895 to around US$1.2950 settling at US$1.2920 at the end of the US session. The Aussie dollar fell from highs near US91.80c to lows near US90.85c before ending the US session near US90.95c. And the Japanese yen held between 106.65 yen per US dollar and JPY107.20, ending US trade near JPY107.10.

* World oil prices recovered after initial weakness on Thursday. Traders weighed up the recent cuts to OPEC demand forecasts against an escalation of the conflict in the Middle East. Brent crude hit a two-year low intraday before recovering to close up US25c or 0.3% to US$98.29 a barrel with the US Nymex price ending US$1.16 a barrel higher at US$92.83 a barrel.

* Base metal prices were mostly weaker on Thursday, with the exception of lead (up 0.3%) and tin (up 0.4%). Zinc (down 1.9%) and Nickel (down 1.7%) were the biggest decliners while copper fell to a near 3-month low on Chinese growth concerns. Gold prices fell on Thursday with the Comex gold futures quote down by US$6.30 an ounce or 0.5% to US$1,239 per ounce. The iron ore price fell US30c or 0.4% to US$81.90 a tonne.

Ahead: In Australia, credit card and lending finance figures are released. In the US, retail sales and business inventories are released.

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