In US economic data, housing starts fell from a 1.488 million annual rate to 1.425m in October (survey: 1.41m). Initial jobless claims fell from 226,000 to 222,000 (survey: 225,000). The Philadelphia Federal Reserve manufacturing index eased from -8.7 points to -19.4 points in November (survey: -6.2 points). The Kansas Fed
manufacturing index rose from -22 points to -10 points in November (survey: -15 points).

European sharemarkets were mixed on Thursday. The continentwide FTSEurofirst 300 index fell by 0.3%. And the UK FTSE 100 fell by 0.1%. But the German sharemarket rose 0.2%, supported by a 7% rise in shares of engineering and technology group Siemens. Siemens posted upbeat fourth quarter results and provided a positive earnings
outlook. But weighing on sharemarkets in Europe were declines in miners and healthcare stocks. In London, finance minister Jeremy Hunt handed down a budget that included tax increases and tighter public spending.

US sharemarkets were weaker on Thursday. St Louis Federal Reserve president James Bullard indicated that interest rates would need to go higher by at least 1 percentage point. On a positive note Reuters reported that “Department store chain Macy’s gained 15% and personal care products retailer Bath & Body Works surged 25.2% after the companies raised their annual profit forecasts.” At the close, the Dow Jones index was down by 7.5 points or less than 0.1% after trading in a 376 point range. The S&P 500 index fell by 0.3%. The Nasdaq index was down by 39 points or 0.4%.

US government bonds fell on Thursday (yields higher) after Federal Reserve president James Bullard warned that rate hikes so far “have had only limited effects on observed inflation”. US Treasury conducted a US$15 billion auction of 10-year Treasury Inflation-Protected Securities (TIPS) at a yield of 1.485%, up from 1.248% previously. US
10-year yields rose by 8 points to near 3.77%. US 2-year yields rose by 9 points to near 4.45%.

Major currencies were mixed against the US dollar in European and US trade. The Euro fell from US$1.0405 to US$1.0310 and was near US$1.0365 at the close of US trade. The Aussie dollar fell from highs near US67.50 cents to US66.30 cents and was near US66.90 cents at US close. And the Japanese yen eased from near 138.90 yen per US dollar to near JPY140.70 and was around JPY140.15 at the US close of trade.

 

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Global oil prices fell by as much as 4.6% on Thursday. Warnings of higher US interest rates and news of rising Covid cases in China weighed on oil prices. Reuters reported that Chinese refiners have asked to reduce Saudi crude volume in December. The Brent crude oil price fell by US$3.08 or 3.3% to US$89.78 a barrel. And the US Nymex crude oil price fell by US$3.95 or 4.6% to US$81.64 a barrel. Base metal prices were weaker on Thursday. US Comex copper futures fell 1.3% in response to a stronger greenback and news of a jump in Covid-19 cases in China.

The gold futures price fell by US$12.80 an ounce or 0.7% to US$1,763.00 an ounce. Spot gold was trading near US$1,760 an ounce in US trade. Iron ore futures rose by US75 cents or 0.8% to US$93.09 a tonne.

Originally published by CommSec