Australian Stock Market Report – Morning August 14, 2014

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By Craig James, CommSec Chief Economist | August 14, 2014 9:11 AM EST

A cashier works at a cash and carry market of Metro AG in Sankt Augustin, near Bonn in this March 18, 2013 file photo. Germany's Metro said on July 31, 2014 the World Cup helped boost quarterly sales at its struggling consumer electronics business as the retailer reported a positive trend at its other units and its board extended the contract of the chief executive.REUTERS/Wolfgang Rattay/Files (GERMANY - Tags: BUSINESS)
A cashier works at a cash and carry market of Metro AG in Sankt Augustin, near Bonn in this March 18, 2013 file photo. Germany's Metro said on July 31, 2014 the World Cup helped boost quarterly sales at its struggling consumer electronics business as the retailer reported a positive trend at its other units and its board extended the contract of the chief executive.REUTERS/Wolfgang Rattay/Files (GERMANY - Tags: BUSINESS)

* In US economic news, retail sales were flat in July, short of the expected 0.2% gain. Excluding autos, sales rose 0.1%, again short of forecasts for a 0.4% gain. The mortgage market index fell by 2.7% in the latest week, dragged down by a 4% fall in refinancing. Business inventories rose by 0.4% as expected in June.

* European shares rose in Wednesday. While Euro zone production fell by 0.3% in June, the decline was attributed to ongoing geopolitical issues, especially Ukraine. The FTSEurofirst 300 index rose by 0.3% boosted by gains of utility E.ON and insurer Swiss Life. The German Dax was up 1.4% and the UK FTSE edged up 0.4%. Australia's major miners were mixed in London trade with shares in BHP Billiton up 0.2% while Rio Tinto was lower by 2.6%.

* US sharemarkets rose on Wednesday despite weak sales figures pushing down the share prices of retailers. The Health Care sector led the gains in the broader S&P 500 index. The Dow Jones index rose by 91 points or 0.6% with the S&P 500 index up by 0.7% while the Nasdaq gained almost 45 points or 1.0%.

* US treasury prices were firmer (yields lower) in response to softer-than-expected economic data. Thomson Reuters also reported that "Wednesday's $24 billion in 10-year notes was met with solid demand." US Treasury will sell $16 billion of 30-year bonds on Thursday. US 2 year yields fell by 3 points to 0.416% while US 10 year yields fell by 4 points to 2.415%.

* Major currencies were volatile against the US dollar over the European and US sessions on Wednesday but ended US trade a little firmer. The Euro rose from lows near US$1.3345 to around US$1.3415 before ending US trade near US$1.3365. The Aussie dollar rose from lows near US92.75c to highs near US93.20c, ending the US session near US93.05c. The Japanese yen traded in a range between 102.22 yen per US dollar to JPY102.52, ending US trade near JPY102.43.

* World oil prices rose on Wednesday. Brent recovered from a 13-month low on investor concern about possible disruptions to oil supplies as a result of turmoil in Iraq and Libya. Nymex crude rose only modestly after the Energy Information Administration said that stockpiles rose by 1.4 million barrels last week. Brent crude rose by US$1.26 or 1.2% to US$104.28 a barrel while the US Nymex price edged higher by US22 cents a barrel to US$97.59 a barrel.

* Base metal prices were lower on Wednesday by up to 2.1% with lead and zinc leading the declines. Gold prices rose modestly on Wednesday against a softer greenback with the Comex gold futures quote up by US$3.90 to US$1,314.50 per ounce. Iron ore fell by US80c on Wednesday or 0.9% to US$93.20 a tonne.

Ahead: In Australia, average weekly earnings figures are released.

Telstra releases its profit result. In the US, the weekly data on claims for unemployment insurance are issued together with import and export price data.

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(Photo: / )
A cashier works at a cash and carry market of Metro AG in Sankt Augustin, near Bonn in this March 18, 2013 file photo. Germany's Metro said on July 31, 2014 the World Cup helped boost quarterly sales at its struggling consumer electronics business as the retailer reported a positive trend at its other units and its board extended the contract of the chief executive.REUTERS/Wolfgang Rattay/Files (GERMANY - Tags: BUSINESS)
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