Australian Stock Market Report - Morning May 7, 2015

In US economic data, the ADP employment report showed the private sector added 169,000 jobs in April, against expectations of a lift of 200,000 jobs. The March result was revised down from 189,000 to 175,000. US non-farm productivity fell 1.9% in the March quarter as the harsh weather weighed on output.

European shares pared gains on Wednesday. Stocks had been higher in early trade but a rally in the Euro and weakness in US stocks weighed on markets. Cyclical sectors were the worst performers with the STOXX real estate sector and travel & leisure sector both losing 2.3%. French Bank Societe Generale fell 2.3% after reporting first quarter results. British supermarket Sainsbury's fell 3.2% after posting its first annual loss in a decade. The FTSEurofirst 300 fell by 0.5% with the German Dax up by 0.2% while the UK FTSE rose 0.1%. Mining shares fell in London trade with BHP Billiton down by 1.0% while Rio Tinto lost 0.1%.

US sharemarkets fell on Wednesday after the Federal Reserve Chair Janet Yellen warned high equity valuations could pose "potential dangers". Investors were also concerned of the potential lift in future interest rates and the rout on global bond markets. The Dow Jones fell by 86 points or 0.5% with the S&P 500 index down by 0.5% and the Nasdaq lost almost 20 points or 0.4%.

US long-term treasury prices eased again on Wednesday (yields higher) in response to the ongoing slide in global bond prices. US 2 year yields were flat at 0.635% while US 10 year yields rose by 7 points to 2.251%.

Major currencies were mostly stronger against the greenback over the European and US sessions on Wednesday. The Euro rose from lows near US$1.1205 to highs near US$1.1370 and ended US trade around US$1.1345. The Aussie dollar rose from lows near US79.50c to highs near US80.30c before ending US trade near US79.70c. And the Japanese yen lifted from 119.85 yen per US dollar to JPY119.20 and was around JPY119.45 at the US close.

World oil prices rose on Wednesday to the highest levels in 2015. The US inventory data showed the first drawdown of US oil inventories in four months. US crude stockpiles fell by 3.9 million barrels last week. Brent crude rose by US25c or 0.4% to US$67.77 a barrel while US Nymex crude rose to an intraday high of US$62.58 a barrel before closing up US53c or 0.9% to US$60.93 a barrel.

Base metal prices were mostly weaker on Wednesday with lead losing 3.6% and aluminium down 3%. The exception was tin which managed to eke out a 0.6% gain. The Comex gold futures price fell by US$2.90 an ounce or 0.2% to US$1,190.30 per ounce. Iron ore rose by US$1 on Wednesday or 1.7% to US$60.10 a tonne.

Ahead: In Australia, employment data is released. In the US, consumer credit figures are released.

[Kick off your trading day with our newsletter]