US MID SESSION MORNING REPORT (7am AEDT)
In US economic news the flash Markit PMI eased from 55 to 53.7 in January. Slower rates of output and new order growth were behind the modest fall. The leading economic indicators index rose by 0.1% in December. US existing home sales rose by 1% in December. Existing home sales totalled 5.09 million units over 2013 - a seven year high. The national median price for existing homes was up 9.9% on a year ago. US jobless claims rose by 1,000 to 326,000 last week.
European shares fell on Thursday, pulled down by a double-digit fall in Nokia and weak US and Chinese economic data. Nokia dropped by 10.7% after it reported a steep fall in sales at its network equipment division - which is expected to become its core business. Chinese manufacturing data depressed the mining sector, which ended down by 0.8%. On a positive note, Germany´s flash PMI rose from 55 to 55.9 in January - its fastest pace in over two year. The FTSEurofirst 300 index fell by 1% with the UK FTSE down by 0.8% and the German Dax down 0.9%. Mining shares were weaker in London trade with BHP Billiton shares down 0.5% while Rio Tinto fell by 0.9%.
US share markets fell on Thursday with the selloff accelerating in afternoon trade. Disappointing Chinese manufacturing data, mixed US earnings and the next week´s FOMC meeting all weighed on investor sentiment. McDonald´s reported weaker-than-expected revenue as fewer customers ate at its restaurants. Netflix surged by 16% after reporting it had added more than 2.3 million customers in the fourth quarter. With an hour of trade left , the Dow Jones was down by 189 points or 1.2%, while the S&P 500 lost 1.1% and the Nasdaq fell 0.8%.
US treasury prices climbed on Thursday, (yields lower), as investors revived safe haven bids following weaker-than-expected Chinese data. US 2 year yields fell by 6 points to 0.36% while US 10 year yields fell by 10 points to 2.77%.
The US dollar fell against the Euro on Thursday, pressured by strong euro zone manufacturing data. The Euro rose from early lows near US$1.3540 to highs around US$1.3695 and was trading near its highs in late US trade. The Aussie dollar fell from highs near US88.15c to lows near US87.35c, and held near US87.55c in late US trade. And the Japanese yen traded between 104.45 yen per US dollar and JPY103.05 and was trading near 103.20 in late trade.
World oil prices were mixed on Thursday following a sizeable drawdown in US oil inventories. US distillates stockpiles fell by 3.21 million barrels. Brent crude fell by US70c or 0.6% to US$107.57 a barrel while US Nymex crude rose by US59c or 0.6% to US$97.32 a barrel.
Base metal prices were weaker on the London Metal exchange on Thursday, with zinc down 2.2% and lead down 1.9%. Copper also lost 1.3% pressured by the weaker Chinese manufacturing data. And the gold price rose in response to a weaker US dollar. Comex gold futures rose by US$23.70 or 1.9% to US$1,262.30 per ounce. The iron ore price rose by US40c to US$123.90 a tonne.
Ahead: In Australia and the US, no economic data is released.
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