Australian Stock Market Report – Morning August 28, 2014

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By Craig James, CommSec Chief Economist | August 28, 2014 9:43 AM EST

The headquarters of mortgage lender Freddie Mac is seen in Mclean, Virginia, near Washington, in this September 8, 2008 file photo. Government-controlled mortgage finance firms Fannie Mae and Freddie Mac said on August 8, 2014 they will pay U.S. taxpayers a combined $5.6 billion in dividends after another profitable quarter. REUTERS/Jason Reed/Files (UNITED STATES - Tags: BUSINESS LOGO)
The headquarters of mortgage lender Freddie Mac is seen in Mclean, Virginia, near Washington, in this September 8, 2008 file photo. Government-controlled mortgage finance firms Fannie Mae and Freddie Mac said on August 8, 2014 they will pay U.S. taxpayers a combined $5.6 billion in dividends after another profitable quarter. REUTERS/Jason Reed/Files (UNITED STATES - Tags: BUSINESS LOGO)

* In US economic data, the weekly mortgage market index rose by 2.8% with the purchase index up 2.6% and the refinancing index up by 2.8%.

* European shares were mixed on Wednesday. Investors weighed data showing the biggest fall in German consumer sentiment in more than three years and monitored news of talks between Russian and Ukrainian leaders. The FTSEurofirst 300 index rose by 0.1% while the blue-chip Euro STOXX 50 index fell by 0.1%. The German Dax was down by 0.2% while the UK FTSE gained 0.1%. Australia's major miners were also mixed in London trade with shares in BHP Billiton up by 0.1% while Rio Tinto lost 0.7%.

* US sharemarkets were flat on Wednesday. Many traders and investors were on holidays and there was no economic data to guide trading. Shares in electronics retailer Best Buy rebounded by 6.3% while shares in clothing retailer Express rose by 12.75% in response to its quarterly revenue result. The Dow Jones index lifted by 15 points or 0.1% and the S&P 500 index rose by less than 0.1% to record highs while the Nasdaq fell by 1 point or less than 0.1%.

* US treasury prices were mixed in thin trade on Wednesday. US Treasury sold $35 billion in five-year notes on Wednesday and will sell $29 billion in seven-year notes on Thursday. US 2 year yields rose by 1 point to 0.516% while US 10 year yields were down by 4 points at 2.36%.

* Major currencies rose modestly higher against the US dollar over the European and US sessions on Wednesday. The Euro rose from lows near US$1.3160 to around US$1.3210, before ending US trade near US$1.3195. The Aussie dollar rose from lows near US93.15c to highs near US93.50c before ending the US session close to US93.35c. And the Japanese yen rose from 104.04 yen per US dollar to JPY103.78, ending US trade near JPY103.88.

* World oil prices were slightly higher on Wednesday. Thomson Reuters noted "In its weekly report, the US Energy Information Administration said crude oil stocks fell by a greater-than-expected 2.07 million barrels last week, but inventories at Cushing, the delivery point for US crude futures, rose 508,000 barrels." Brent crude rose by US22c or 0.2% to US$102.72 a barrel with the US Nymex price up by US2c a barrel to US$93.88 a barrel.

* Base metal prices were again mixed on Wednesday with gains or losses not exceeding 1.2%. Aluminium rose by 0.7% while tin fell by 1.2%. Gold prices fell on Wednesday with the Comex gold futures quote down by US$1.80 or 0.1% to US$1,283.40 per ounce. Iron ore fell by US70c or 0.8% on Wednesday to US$88.20 a tonne.

Ahead: In Australia, capital expenditure and new home sales data are released. The Tasmanian Budget is handed down. In the US, revised economic growth (GDP) figures are released with weekly jobless claims data, pending home sales and the Kansas City Federal Reserve Manufacturing Index.

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(Photo: / )
The headquarters of mortgage lender Freddie Mac is seen in Mclean, Virginia, near Washington, in this September 8, 2008 file photo. Government-controlled mortgage finance firms Fannie Mae and Freddie Mac said on August 8, 2014 they will pay U.S. taxpayers a combined $5.6 billion in dividends after another profitable quarter. REUTERS/Jason Reed/Files (UNITED STATES - Tags: BUSINESS LOGO)
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