In US economic data, the producer price index (PPI) rose by 0.2% in October (survey: +0.4%). The annual growth rate fell from 8.4% to 8.0%. The core PPI (excludes food and energy) was flat (survey: +0.3%). Annual growth of the core PPI was 6.7% (survey: 7.2%). The New York Empire State index rose from -9.1 points to +4.5 points (survey: -5 points).

European sharemarkets were mixed on Tuesday. The continentwide FTSEurofirst 300 index rose by 0.4%. But the UK FTSE 100 fell by 0.2%. Technology stocks led the way, up 1.7%, on hopes that the US Federal Reserve can scale back rate hikes. Oil & gas rose 1.2% and miners rose 1.1% but telecoms fell 1%. Shares in Vodafone fell 7.9% after the company cut its full-year free cash flow forecast and said annual earnings would come in the bottom range of its target.

US sharemarkets rose on Tuesday in response to a lower-thanexpected reading on business inflation. Shares of the top US retailer, Walmart, jumped 6.5% after it lifted its annual sales and profit forecasts. Shares in Home Depot rose 1.6% despite leaving forecasts unchanged. Reports of a Russian missile landing in Poland added to sharemarket volatility in afternoon trade. At the close of trade, the Dow Jones index was up 56 points or 0.2% after trading in a 667 pointrange over the session. The S&P 500 index rose by 0.9%. The Nasdaq index was up by 162 points or 1.5%.

US government bonds rose on Tuesday (yields lower) after producer prices rose less than expected. Federal funds futures traders are pricing in a 91% probability the US central bank will hike rates by 50 basis points when it meets on December 13-14, and a 9% chance of a 75bp increase. US 10-year yields fell by 10 points to near 3.76%. And US 2-year yields fell by 6 points to 4.35%.

Major currencies were mixed against the US dollar in European and US trade. The Euro fell from highs near US$1.0475 to lows near US$1.0280 and was near US$1.0355 at the US close. The Aussie dollar held between US66.90 cents and US67.90 cents and was near US67.65 cents at the US close. And the Japanese yen rose from near
140.40 yen per US dollar to JPY137.80 and was near JPY139.15 at the US close.

 

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Global oil prices rose on Tuesday by around 1%, reversing earlier losses. Supporting prices were a weaker US dollar, rising global sharemarkets and hopes of further easing of Chinese Covid restrictions. In addition a European Union ban on seaborne Russian crude, set to start on December 5, means that 1.1 million barrels per day must be replaced, the International Energy Agency said. The Brent crude oil price rose by US72 cents or 0.8% to US$93.86 a barrel. And the US Nymex crude oil price rose by US$1.05 or 1.2% to US$86.92 a barrel.

Base metal prices were mixed on Tuesday. Reuters reported: “Copper’s rally paused on Tuesday as rising COVID-19 cases and weak factory activity in China held prices below Monday’s five-month high.” High Grade copper fell by US10 cents or 2.4%.

The gold futures price fell by US10 cents an ounce to US$1,776.80 an ounce. Spot gold was trading near US$1,779 an ounce at the US close. Iron ore futures rose by US20 cents or 0.2% to US$92.29 a tonne.

Originally published by CommSec