MORNING REPORT
(7am AEST)

US durable goods orders fell by 0.1pct in August after rising by 4.1pct in July. Economists had expected a flat result. Non-defense orders excluding aircraft rose by 1.1pct. And applications for US mortgages rose by 9.3pct last week as refinancing demand rose in response to lower mortgage rates. The index of refinancing applications rose by 11.2pct while loans to purchase new homes rose by 2.6pct.

European shares fell for the first time in four days on Wednesday as investors took profits and awaited more detail on moves to contain the region´s debt crisis. And mining stocks fell on concerns about slower growth in China. In London trade shares in BHP Billiton fell by 4.1pct with Rio Tinto down by 4.4pct. The FTSEurofirst index fell by 1.2pct while the German Dax lost 0.9pct and the UK FTSE fell by 1.4pct.

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US sharemarkets sold off in the final hour of trade as investors looked to book profits ahead of the end of the month and the end of the quarter. But shares in Amazon rose by 2.5pct after it unveiled a new computer tablet. The Dow Jones fell by almost 180 points or 1.6pct, losing more than 150 points in the last 45 minutes of trade. The S&P 500 fell by 2.1pct while the Nasdaq lost just over 55pts or 2.2pct.

US long-term treasuries fell again on Wednesday (yields higher) despite weakness in equities and commodities markets. US 2yr yields edged 1 point higher to 0.254pct and US 10yr yields rose by 2pts to 1.994pct.

The Euro and commodity currencies rose over the European session only to give back the gains in US trade. The Euro rose from lows near US$1.3550 to US$1.3685 before ending the US session near US$1.3555. The Aussie dollar also lifted from lows around US98.45c to near US99.55c, before losing all the gains and more to end US trade near US97.80c. And the Japanese yen held in a tight range between 76.30 yen per US dollar and JPY76.60 and ended US trade near JPY76.50.

Global crude oil prices fell on Wednesday. The US Energy Information Administration reported that crude oil inventories rose by 1.9 million barrels in the latest week, ahead of forecasts of a 800,000 rise. And oil prices fell with other commodities in response to a firmer greenback. Nymex crude oil fell by US$3.24 or 3.8pct to US$81.21 a barrel and London Brent crude lost US$3.33 to US$103.81 a barrel.

Base metal prices fell on the London Metal Exchange on Wednesday. Some analysts cite weaker demand from China as the reason behind the fall, others blame position-squaring ahead of the end of the month and quarter. Tin fell by 5.7pct while copper lost 4.6pct and other metals eased up to 2.4pct. And the gold price also fell in line with other commodities with the Comex December gold price lower by US$34.40 an ounce or 2.1pct to US$1,618.10.

Ahead: In Australia, population data will be released. In the US, weekly jobless claims data is released together with GDP figures. Federal Reserve chief Ben Bernanke delivers a speech.

*This commentary is a general account of the day's trading and is not intended to be taken as a recommendation to buy, hold or sell any particular stock.

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