Australian Stock Market Report – Morning September 4, 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, auto sales were estimated at a 17.4 million annual rate in August, well above forecasts for 16.6m annualised sales. Factory orders rose by 10.5% in July, just below forecasts for an 11% gain. Chain store sales in the latest week were up 4.9% on a year ago, above the 4.0% gain recorded last week. The ISM New York index rose from 644.4 to 648.0 in August.

* The Beige Book summary of conditions across US Federal Reserve districts indicated that the US economy grew at a "moderate" pace in recent weeks.

* European shares were firmer on Wednesday. There was speculation that a ceasefire may be reached between Ukraine and Russia. And some investors were hopeful of stimulus being provided by the European Central Bank on Thursday. The FTSEurofirst 300 index rose by 0.7% with the German Dax up 1.3% while the UK FTSE rose by 0.7%. Australia's major miners were mixed in London trade with shares in BHP Billiton down by 1.5% while Rio Tinto rose by 0.6%.

* US sharemarkets rose sharply at the start of trade, before giving back gains over the session. Shares in Apple fell by 4.2% with investors electing to take profit ahead of product launches next Tuesday. After being up 84 points, the Dow Jones index settled higher by almost 11 points or 0.1%. The broader S&P 500 index fell by 0.1% while the Nasdaq lost 26 points or 0.6%.

* US long-term treasury prices were higher (yields lower) as traders positioned ahead of US jobs data on Friday. US 2 year yields fell 1 point to 0.52% while US 10 year yields were down by 3 points to 2.40%.

* Major currencies rose against the US dollar over the European and US sessions on Wednesday. The Euro rose from lows near US$1.3125 to around US$1.3160, before ending US trade near US$1.3145. The Aussie dollar rose from lows near US92.85c to highs just below US93.50c before ending the US session close to the highs. And the Japanese yen eased from 105.12 yen per US dollar to JPY104.75, ending US trade near JPY104.76.

* World oil prices rebounded on Wednesday in response to a weaker US dollar. A weaker greenback improves the purchasing power of commodity buyers in Europe and Asia. Brent crude rose by US$2.43 or 2.4% to US$102.77 a barrel with the US Nymex price up by US$2.66 a barrel to US$95.54 a barrel.

* Base metal prices were generally lower by up to 1.6% on Wednesday with lead down the most. But nickel bucked the trend, up by 2.8%. Gold prices rebounded on Wednesday in line with oil as the US dollar reversed course and weakened. The Comex gold futures quote was up by US$5.30 or 0.4% to US$1,270.30 per ounce. Iron ore fell by US$1.00 or 1.2% on Wednesday to US$85.70 a tonne.

Ahead: In Australia, international trade, retail trade and overseas arrivals & departures data are released. In the US, the ADP employment index, ISM services gauge, Challenger job lay-off series, productivity and weekly jobless claims data are released.

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