Australian Stock Market Report – Morning December 23, 2014

A view of a neighborhood with three story homes in Las Vegas, Nevada April 4, 2013. The buying of foreclosed homes and other distressed homes by three big institutional buyers is reshaping the housing market in Las Vegas. REUTER/Steve Marcus (UNITED STATES - Tags: REAL ESTATE BUSINESS CONSTRUCTION)

* In US economic data, the national activity index rose from a revised reading of +0.31 in October to +0.73 in November. Existing home sales fell by 6.1% to a 4.93 million annual rate in November, down from an expected level of 5.2 million.

* European shares were firmer on Monday with the FTSEurofirst 300 index up by 0.4% and the German Dax up by 0.8%. Investors were comforted by developments in Greece. Shares in Greece rose by 0.6% with Reuters reporting that "Prime Minister Antonis Samaras offered on Sunday to bring independents into the government and hold new elections in late 2015 if lawmakers back him to elect a new president." In London trade, the FTSE rose by 0.5% but shares in BHP Billiton fell by 0.7% while Rio Tinto lost 0.3%.

* US sharemarkets rose on Monday. Technology shares were favoured by investors while shares in the energy sector weakened in response to lower oil and natural gas prices. At the close of trade the Dow Jones index was up by almost 155 points or 0.9% to record highs with the S&P 500 index up by 0.4% to record highs while the Nasdaq was higher by 16 points or 0.3%.

* US treasuries were mixed on Monday as investors debated the timing of rate hikes and mulled lower oil prices. US Treasury sold US$27 billion of 2-year notes on Monday and will sell $35 billion of 5-year notes and $13 billion of re-opened 2-year floating rate notes on Tuesday and $29 billion of 7-year notes on Wednesday. US 2 year yields rose by 2 points to 0.663% while US 10 year yields were flat near 2.164%.

* Major currencies fell against the greenback in European and US trade on Monday. The Euro rose from near US$1.2235 to around US$1.2270 but fell back to US$1.2215 and was near the lows in late US trade. The Aussie dollar fell from highs near US81.70c to lows around US81.25c and was near the lows in late US trade. And the Japanese yen weakened from 119.44 yen per US dollar to JPY120.06 and was near JPY120.04 in late US trade.

* World oil prices fell again on Monday. Saudi Arabian oil minister Ali al-Naimi said that it was "not in the interest of OPEC producers to cut their production, whatever the price is." Brent crude fell by US$1.27 or 2.1% to US$60.11 a barrel. US Nymex crude fell by US$1.87 or 3.3% to US$55.26 a barrel.

* Base metal prices fell by up to 1.5% on the London Metal Exchange on Monday with aluminium leading the declines. But nickel rose by 0.3%. Gold eased in response to a firmer greenback on Monday with Comex gold futures down by US$16.20 an ounce or 1.4% to US$1,179.70 per ounce. Iron ore fell by US$1.50 to US$68.00 a tonne on Monday after rising by the same amount on Friday.

Ahead: In Australia the weekly consumer confidence index is scheduled. In the US, data on durable goods orders is released with weekly chain store sales, revised economic growth (GDP) figures, new home sales, personal income data and the Richmond Federal Reserve index.

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