Australian Stock Market Report – Morning August 21, 2014

By @ibtimesau on
Janet Yellen
International Monetary Fund Managing Director Christine Lagarde (L) and U.S. Federal Reserve Board Chair Janet Yellen have a question and answer period at the inaugural Michel Camdessus Central Banking lecture in Washington July 2, 2014. REUTERS/Gary Cameron (UNITED STATES - Tags: POLITICS BUSINESS)

* According to minutes from the last Federal Reserve meeting some members were encouraged by recent developments: "Labor market conditions had moved noticeably closer to those viewed as normal in the longer run." But then the report noted: "Most Fed policymakers wanted more evidence before changing rate views."

* In US economic data, the mortgage market index rose by 1.7% last week with purchases down 0.7% and refinancing up by 2.7%.   

* European shares fell slightly on Wednesday as investors dissected profit results. Shares in Carlsberg fell 3.6% in response to a profit warning, but shares in Heineken rose 8.3% after posting a better-than-expected profit. The FTSEurofirst 300 index fell by 0.1% with the German Dax down 0.2% and the UK FTSE lost 0.4%. Australia's major miners were higher in London trade with shares in BHP Billiton up by 0.7% while Rio Tinto lifted by 1.3%.

* US sharemarkets rose on Wednesday after minutes from the  Federal Reserve confirmed policymakers were in no rush to raise interest rates. The Dow Jones index rose by almost 60 points or 0.4% with the S&P 500 index up by 0.3% while the Nasdaq fell by 1 point or less than 0.1% from 14-year highs.

* US treasury prices were lower on Wednesday (yields higher) as comments from Federal Reserve policymakers suggested that they were moving closer to lifting rates. US 2 year yields rose by 3 points to 0.476% while US 10 year yields rose 2 points to 2.43%.

* The Euro and the Japanese yen ended weaker against the US dollar after European and US sessions on Wednesday. The Euro eased from highs near US$1.3305 to around US$1.3255, ending US trade near the lows. The Aussie dollar eased from highs near US93.15c to US92.75c before ending the US session close to US92.85c. And the Japanese yen eased from 103.10 yen per US dollar to JPY103.83, ending US trade near the weakest levels.

* World oil prices rose on Wednesday. Data in the last week showed that US crude stocks fell by 4.5 million barrels, led by distillate inventories. Brent crude rose by US72 cents to US$102.28 a barrel and the US Nymex price rebounded by US$1.59 a barrel or 1.7% to US$96.07 a barrel.

* Base metal prices rose by up to 2.6% on Wednesday with zinc up the most although tin edged only 0.1% higher. Gold prices fell again on Wednesday as the US dollar rose with the Comex gold futures quote down by US$1.50 or 0.1% to US$1,295.20 per ounce. Iron ore fell by US70c on Wednesday to US$92.30 a tonne. 

Ahead: In Australia, no major economic data is scheduled. In China the "flash" manufacturing gauge is released. In the US, weekly data on claims for unemployment insurance are released together with existing home sales, the leading index and Philadelphia Federal Reserve Index.

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