US MID SESSION MORNING REPORT (8am AEDT)
In US economic data, durable goods orders fell by a less than expected 1% in January after a 5.3% fall in December. Excluding transportation orders rose by 1.1% in January - the largest rise since May 2013. US jobless claims rose by an unexpected 14,000 to a seasonally adjusted 348,000 last week.
Federal Reserve Chair Janet Yellen provided testimony to the Senate Banking Committee and the tone was more dovish than commentary provided two weeks ago. Yellen said the Fed would be on alert to make sure recent economic weakness was due to cold weather than a fundamental slowdown.
European shares pared most of the early losses on Thursday as better than expected US economic data and Fed commentary supported sentiment late in the session. Disappointing company reports kept cyclical sectors under pressure. Royal Bank of Scotland slumped by 8% after posting a loss. Allianz dropped 2.3% following difficulties at its Pimco unit. The FTSEurofirst 300 index fell by 0.2% with the UK FTSE up by 0.2% and the German Dax lost 0.8%. Mining shares rose in London trade with BHP Billiton up 0.5% while Rio Tinto rose 1.5%.
US sharemarkets lifted on Thursday after comments from Federal Reserve Chair Janet Yellen offered mild relief to investors worried about the central bank´s tapering of economic stimulus. At the close of trade, the US Dow Jones was up by 74 points or 0.5% with the S&P 500 up 0.5% and the Nasdaq gained 27 points or 0.6%.
US treasury prices rose again on Thursday (yields lower) following strong demand at a debt auction. Treasury sold $35 billion in five-year notes at a high yield of 1.53%. Fear over Ukraine added to the safety bid for bonds. US 2 year yields fell 1 point to 0.32% while US 10 year yields fell by 2 points to 2.65%.
Major currencies rose against the greenback over the European and US sessions. The Euro rose from US$1.3645 to US$1.3720 and was near US$1.3705 in afternoon US trade. The Aussie dollar rose from lows near US89.05c to highs near US89.70c, and was around US89.60c in afternoon US trade. And the Japanese yen traded between 102.40 yen per US dollar to JPY101.70 and was trading near JPY102.10 in afternoon US trade.
World oil prices fell on Thursday pressured by civil unrest in Ukraine that curbed overall risk appetite and fuelled fear of slower growth across Europe. Brent crude fell by US51c to US$109.01 a barrel while US Nymex crude fell by US19c or 0.2% to US$102.40 a barrel.
Base metal prices were mixed on the London Metal Exchange on Thursday. Nickel was the best performer lifting by 1.6% while copper and aluminium both fell by 0.3%. The gold price rose on Thursday finding support from the turmoil in Ukraine. The Comex gold futures price rose by US$3.80 or 0.3% to US$1,331.80 per ounce. The iron ore price rose by US20c on Thursday to US$118.00 a tonne.
Ahead: In Australia, private sector credit data is released. In the US, no major economic data is scheduled.
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