Morning Report (06:05 AEST)
In US economic data, retail sales rose by 0.3% in May, short of forecasts for a 0.6% gain. But the April reading was revised up from +0.1% to +0.5%. Import and export prices rose by 0.1% in May. New claims for unemployment insurance rose by 4,000 to 317,000 in the latest week, above forecasts for a reading of near 310,000.
US President Barack Obama has not ruled out military action to assist the Iraqi government and halt the advance of Sunni Islamist rebel forces in their march towards Baghdad.
European shares ended little-changed on Thursday. Merger hopes in the telecom sector were balanced against declines in mining and airlines. Metal prices fell and oil prices soared in response to violence in Iraq. The FTSEurofirst 300 index was flat with the German Dax down by 0.1% while the UK FTSE rose by 0.1%. Australia´s major miners were lower in London trade with shares in BHP Billiton down by 1.3% while Rio Tinto lost 3.1%.
US sharemarkets fell on Thursday with investors trimming positions in equities in favour of safe-haven assets like government bonds and gold in response to violence in Iraq. The Dow Jones fell by 110 points or 0.7% with the S&P 500 down by 0.7% and the Nasdaq lost 34 points or 0.8%.
US long-term treasury prices rose sharply on Thursday (yields lower) as investors flocked to safe-haven assets like government bonds in response to violence in Iraq. US Treasury also sold US$13 billion in 30-year bonds on Thursday. US 2 year yields were down 2 points to 0.415% while US 10 year yields fell 6 points to 2.584%.
Major currencies rose against the US dollar over the European and US sessions on Thursday. The Euro rose from lows near U$1.3510 to US$1.3570, and closed US trade around US$1.3565. The Aussie dollar rose from lows near US93.85c to around US94.35c before finishing US trade around US94.30c. And the Japanese yen strengthened from 102.14 yen per US dollar to JPY101.58, ending US trade near the strongest levels.
World oil prices rose sharply on Thursday on fears that the violence in Iraq could threaten oil supplies. Brent crude rose by US$2.45 or 2.2% to a 6-month high of US$112.40 a barrel with US Nymex up by US$2.13 or 2.0% to a 9-month high of US$106.53 a barrel.
Base metal prices were lower by between 1.1-2.4% on the London Metal Exchange on Thursday with lead and zinc recording the biggest declines. The Comex gold futures quote rose by US$12.80 an ounce or 1.0% to US$1,274.00 per ounce. Iron ore fell by US$2.00 a tonne or 2.2% on Thursday to US$91.50 a tonne.
Ahead: In Australia, lending finance data is released. In the US, data on producer prices and consumer sentiment are released. In China, production, employment and retail sales data is released.
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