In US economic data, consumer inflation expectations for the year ahead fell from 5.9% in October to 5.2% in November, the lowest level since August 2021 (survey: 5.8%). The budget deficit stood at US$248.5bn in November compared to a deficit of US$191.3bn last year (survey: -US$248bn).

European sharemarkets fell on Monday as investors braced for US, UK and European central bank interest rate decisions. Rising Covid-19 infections in China dampened sentiment, with mining stocks shedding 1.7%. The continent-wide FTSEurofirst 300 index fell by 0.5%. And the UK FTSE 100 index dipped 0.4% despite the UK economy, as measured by gross domestic product, expanding by 0.5% in October (survey: +0.4%).

US sharemarkets rebounded on Monday after the New York Federal Reserve released consumer survey data showing inflation expectations declined in November. Shares of Microsoft rose by 2.9% following the tech giant’s cloud deal worth US$2 billion to buy a 4% stake in the London Stock Exchange Group. Biotech firm Horizon Therapeutics shares surged 15.5% following a buyout offer from Amgen (-0.7%). Shares of Coupa Software soared 26.7% after agreeing to sell itself to private equity firm Thoma Bravo. Boeing shares gained 3.8% following reports that the airline is close to a deal with Air India. The Dow Jones index closed up by 529 points or 1.6%. The S&P 500 index gained 1.4% and the Nasdaq index added 139 points or 1.3%.

US government bonds were weaker on Monday (yields higher) as and consumer inflation figures on Tuesday. The US Treasury sold US$40 billion of 3-year notes at a yield of 4.093% into solid demand. But the US$32 billion auction of 10-year notes saw weaker investor demand, with a high yield of 3.625%. US 10-year Treasury yields rose by around 5 points to near 3.62%. And US 2- year Treasury yields lifted by around 6 points to near 4.39%.

Major currencies were mixed against the US dollar in European and US trade. The Euro rose from lows near US$1.0508 to highs near US$1.0577 and was near US$1.0535 at the US close. But the Aussie dollar fell from highs near US67.92 cents to lows near US67.27 cents and was near US67.50 cents at the US close. And the Japanese yen eased from near 136.62 yen per US dollar to JPY137.84 and was near JPY137.70 at the US close.

 

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Global oil prices jumped by up to 3% on Monday, as a key North American crude pipeline remained shut with no timeline for reopening. TC Energy shut the Keystone pipeline after an oil spill was discovered last Wednesday in Kansas, US. The Brent crude oil price rose by US$1.89 or 2.5% to US$77.99 a barrel. And the US Nymex crude oil price gained US$2.15 or 3% to US$73.17 a barrel.

Base metal prices retreated on Monday. Copper dipped 2.1%, weighed down by worries about the economy in top metals consumer China as it grapples with new Covid-19 outbreaks, and uncertainty over US interest rate hikes. Aluminium was down 2.3%.

The gold futures price fell by US$18.40 an ounce or 1% to US$1,792.30 an ounce. Spot gold was trading near
US$1,781 an ounce at the US close. Iron ore futures slid US$1.01 a tonne or 0.9% to US$109.47 a tonne.

Ahead: In Australia, the CBA Household Spending Intentions report is issued with business and consumer confidence surveys and overseas travel/migration data. In the US, the Consumer Price Index (CPI) is scheduled with the NFIB Small Business Optimism Index

Originally published by CommSec