Australian Securities Exchange (ASX)
People walk past the Australian Securities Exchange (ASX) building in central Sydney October 20, 2008. Reuters/Daniel Munoz
  • Minutes of the last US Federal Reserve meeting show that members "concluded that, although it had seen further progress, the economic conditions warranting an increase in the target range for the federal funds rate had not yet been met." Members continued to await further information on the economic outlook and expressed concern about lower oil prices and spillovers from slower economic growth in China.
  • In US economic data, consumer prices rose by 0.1% in July, while core price prices (excludes food and energy) also rose by 0.1%. Both results were short of estimates for gains of 0.2%.
  • European shares fell on Wednesday. A number of weak earnings results weighed on markets as well as concerns over the health of the Chinese economy. Shares in Carlsberg fell by 9.2% after cutting its profit forecast. The FTSEurofirst 300 index fell by 1.9% with the German Dax down by 2.1% while the UK FTSE index fell by 1.9%. In London trade mining shares were lower with both BHP Billiton and Rio Tinto down by 3.7%.
  • US sharemarkets were volatile on Wednesday. The Dow Jones was down 229 points in late morning trade but recovered briefly after the Fed minutes to be up 6 points. The Dow sold off again after traders dissected the Fed minutes. The Dow Jones ended lower by over 162 points or 0.9% with the S&P 500 down by 0.8% while the Nasdaq lost 40 points or 0.8%.
  • US treasury prices rose on Wednesday (yields lower) after Federal Reserve policymakers appear no closer to raising interest rates. US 2 year yields fell by 6 points to 0.66% with US 10 year yields down by 7 points to 2.12%.
  • Major currencies lifted against the greenback after the Federal Reserve gave no indication on when interest rates would start to rise. The euro rose from lows near fell from near US$1.1020 to highs near US$1.1130, ending US trade near its highs. The Aussie dollar rose from lows near US73.10c to highs around US73.70c before ending US trade near US73.50c. And the Japanese yen strengthened from 124.47 yen per US dollar to JPY123.70 before ending US trade around JPY123.77.
  • World oil prices slumped on Wednesday to 6½ year lows. US crude oil inventories surprisingly rose by 2.6 million barrels to 456.21mb in the latest week. Analysts had tipped an 800,000-barrel decline in stocks. Brent crude fell by US$1.65 or 3.4% to US$47.16 a barrel while US Nymex crude fell by US$1.82 or 4.3% to US$40.80 a barrel.
  • Base metal prices were mixed on the London Metal Exchange with lead, zinc, aluminium and nickel up as much as 1.2% with copper and tin down as much as 0.9%. The Comex gold futures price rose by US$11.00 or 1.0% to US$1,127.90 per ounce. After the Fed minutes spot gold rose to US$1,133 an ounce. Iron ore fell by US10c to US$55.90 a tonne.

Ahead: In Australia, the Commonwealth Bank Business Sales index is released. In the US, data on existing home sales is released with the leading index, weekly jobless claims and the Philadelphia Federal Reserve index.

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