In US economic data, existing home sales fell by 7.7% in November to a 4.09 million annualised rate (survey: 4.2m), the second weakest pace since November 2010. The Conference Board consumer confidence index rose from 101.4 to an 8- month high of 108.3 in December (survey: 101). The current account deficit narrowed by US$21.6 billion to US$217.1 billion in the September quarter (survey: -US$222bn). MBA mortgage applications rose by 0.9% last week.

European sharemarkets rose on Wednesday, with shares of consumer discretionary (+2.4%) firms such as Adidas (+6.8%) and Puma (+9.5%) leading gains after US peer Nike beat quarterly revenue and profit expectations. In Germany, GfK’s January consumer confidence index rose from -40.1 to -37.8 (survey: -38). And in the UK, CBI’s retailing reported sales lifted from -19 to +11 in December (survey: -24). The continent-wide FTSEurofirst 300 index added 1.6% with the UK FTSE 100 index up 1.7%.

US sharemarkets advanced on Wednesday as investors digested better-than-expected earnings reports and an improvement in consumer confidence. Nike shares soared 12.2% after the company topped earnings and revenue estimates for its most recent quarter. FedEx shares gained 3.4% on the delivery company’s plans to slash US$1 billion in costs. Shares of cruise operator Carnival Corp jumped 4.7% after posting a smallerthan-expected quarterly loss. At the close of trade, the Dow Jones index rose by 527 points or 1.6%. The S&P 500 index lifted by 1.5% and the Nasdaq index added 162 points or 1.5%.

US government bonds rose on Wednesday (yields lower) as investors waited on inflation data due on Friday for further clues about whether US price pressures are continuing to moderate. The US Treasury sold US$12 billion worth of 20-year notes at a yield of 3.935% into solid demand. US 10-year Treasury yields fell by around 1 point to near 3.67%. US 2-year Treasury yields dipped by around 5 points to near 4.22%.

Major currencies were mixed against the US dollar in European and US trade. The Euro fell from highs near US$1.0642 to lows near US$1.0589 and was near US$1.0610 at the US close. But the Aussie dollar lifted from lows near US66.58 cents to highs near US67.27 cents and was near US67.10 cents at the US close. And the Japanese yen eased from 131.54 yen per US dollar to JPY132.49 and was near JPY132.30 at the US close.

 

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Global oil prices rose by almost 3% on Wednesday after data showed a larger-than-expected draw in US crude stockpiles. Inventories fell by 5.89 million barrels last week, according to the US government, compared with analyst estimates for a drop of 1.66 million barrels. The Brent crude oil price rose by US$2.21 or 2.8% to US$82.20 a barrel. And the US Nymex crude oil price gained US$2.06 or 2.7% to US$78.29 a barrel.

Base metal prices climbed on Wednesday. Copper prices rose by 0.4% on investor expectations that China’s easing of Covid-19 restrictions will eventually lift demand. Aluminium was up by 1%.

The gold futures price settled unchanged from the previous session at US$1,825.40 an ounce. Spot gold was trading near US$1,815 an ounce at the US close. Iron ore futures lifted US88 cents a tonne or 0.8% to US$110.74 a tonne, as China’s steady stream of supportive policy measures improved the likelihood of a recovery in the housing market.

Ahead: In the US, data on initial jobless claims and economic growth (GDP) are scheduled. The Conference Board leading index, Kansas City Fed manufacturing index and the Chicago Fed national activity index are all released.

Originally published by CommSec