Australian Stock Market Report – Morning 12/2/13

MORNING REPORT
(5.15am AEDT)

In US economic news, foreign central bank holdings of US debt rose by $11.763 billion to $3.35 trillion in the latest week.

Ratings agency, Moody´s, has upgraded Greece´s credit rating by two notches from Caa3 to single C reflecting progress with fiscal consolidation. Standard & Poor´s downgraded Netherlands from AAA to AA+ and upgraded the outlook on Spain to stable.

The official Chinese purchasing managers index was steady at 51.4 in November, above forecasts of 51.1.

European shares were mixed on Friday as investors and traders squared positions at the end of the week and month. The FTSEurofirst 300 index was flat, the German Dax rose 0.2% and the UK FTSE lost 0.1%. In UK trade, shares in BHP Billiton fell by 0.9% while Rio Tinto lost less than 0.1%.

US sharemarkets were mixed on Friday in thin trade. The Dow Jones lost almost 11 points or 0.1%, with the S&P 500 down by 0.1% while the Nasdaq lifted 15pts or 0.4% to a 13-year high. The Dow Jones and S&P 500 indexes rose 0.1% over the week with the Nasdaq up 1.9%. Over the month the Dow Jones rose 3.5% with the S&P 500 up 2.8% and Nasdaq up 3.6%.

US treasuries were flat on Friday in a thin, shortened trading session. US 2yr yields fell by less than 1pt to 0.285pct while US 10yr yields rose by 1pt to 2.746pct. Over the week US 2yr yields fell by 0.6pts and US 10yr yields rose by 1.5pts.

The US dollar was mixed against major currencies in thin European and US trade on Friday. The Euro held between US$1.3580 and US$1.3620, ending New York trade near US$1.3590. The Aussie dollar held between US90.85c and US91.40c, and closed US trade at US91.10c. And the Japanese yen held between 102.10 yen per US dollar to JPY102.48 and ended US trade near JPY102.40.

World oil prices were mixed on Friday. Brent crude fell by US$1.17 or 1.1% to US$109.69 a barrel while US Nymex crude rose by US42c or 0.5% to US$92.72 a barrel. Traders weighed low inventory levels in the US, continued supply disruptions in Libya and the potential for more oil supplies from Iran. Over the week Brent fell by 1.2% while Nymex lost 2.2%.

Base metal prices rose up to 1.2% on the London Metal Exchange on Friday with zinc and tin leading the way. Over the week metals fell up to 1.6% with aluminium leading the declines. The gold futures price rose on Friday with bargain hunting prompted by a softer US dollar with the Comex December futures gold price up by US12.50 or 1.0% to US$1,250.40 per ounce. Over the week gold rose $6.30 or 0.5% but lost 5.6% over the month - its worst November since 1978. The iron ore price was flat at US$136.40 a tonne on Friday and fell 10c over the week.

Ahead: In Australia, the monthly inflation gauge, building approvals, RP Data-Rismark House Price Index, Business Indicators and Performance of Manufacturing index are scheduled. In China, the HSBC Purchasing Managers index is released. In the US, the ISM manufacturing index and auto sales data released.

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