Australian Stock Market Report - Midday May 18, 2015

In US economic data, industrial production fell by 0.3% in April, short of forecasts tipping a 0.1% rise. Consumer sentiment slumped from 95.9 to 88.6 in May, below expectations centred on 96.0. And overall there was a net capital outflow from the US in March totalling US$100.9 billion.

European shares eased on Friday as a stronger Euro weighed on share prices of multinationals and other exporters. The FTSEurofirst 300 fell by 0.5% with the German Dax down by 1.0% and the UK FTSE was weaker by 0.2%. Mining shares were weaker in London trade with BHP Billiton down by 1.0% while Rio Tinto fell by 0.8%.

US sharemarkets ended largely flat on Friday but the broader S&P 500 ended at a record high for a second straight day. Traders mulled weaker economic data and a weaker greenback. The Dow Jones rose by 20 points or 0.1% with the S&P 500 index up by 0.1% while the Nasdaq ended lower by 2.5 points or 0.1%. Over the week the Dow rose by 0.4%, the S&P 500 rose by 0.3% and the Nasdaq rose by 0.9%.

US long-term treasury prices soared (yields lower) in response to weak US industrial production and consumer sentiment data. US 2 year yields fell by 2 points to 0.54% while US 10 year yields fell by 9 points to 2.15%. Over the week US 2 year yields fell by 8 points and US 10 year yields fell by 14 points.

Major currencies rebounded from lows in response to weaker US economic data. The Euro rose from lows near US$1.1325 to US$1.1465 and ended US trade around US$1.1450. The Aussie dollar rose from lows near US79.95c to around US80.60c before ending US trade near US80.30c. And the Japanese yen lifted from near 119.90 yen per US dollar to JPY119.20 and was around JPY119.30 at the US close.

World oil prices were mixed on Friday as traders debated the future direction for the market. Brent crude rose by US11 cents to US$66.81 a barrel while US Nymex crude fell by US19c to US$59.69 a barrel. Over the week Brent rose by US$1.42 or 2.2% and Nymex rose by US30c or 0.5%.

Base metal prices were mixed on Friday. Aluminium, zinc and tin fell up to 0.9% while other metals rose up to 1.5%. Over the week metals were largely lower up to 3.1% but copper rose 0.4%. The Comex gold futures price rose by US10c an ounce to US$1,218.30 per ounce and over the week gold rose by US$36.40 or 3.1%. Iron ore fell by US20c or 0.3% on Friday to US$61.00 a tonne. Over the week iron ore rose 50c. Over the week iron ore rose by US50c or 0.8%.

Ahead: In Australia, new motor vehicle sales data is scheduled and Reserve Bank Deputy Governor Philip Lowe delivers a speech. In

the US, the NAHB housing market index is released. In China, data on home prices is expected.

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