In the US, the employment cost index rose 1.0% in the December quarter (survey: +1.1%). The FHFA house price index fell 0.1% in November (survey: -0.5%). S&P Case-Shiller home prices fell 0.8% in November (survey: -1%). The Conference Board consumer confidence index fell from 109 to 107.1 in January (survey: 109). The Chicago purchasing managers’ index (PMI) eased from 44.9 to 44.3 in January (survey: 43). The Dallas Federal Reserve services index rose from -20.5 to -15 in January (survey: -12). Redbook chain store sales rose 4.9% in the past week on a year ago compared with 4.6% in the prior week.
European sharemarkets closed mostly lower on Tuesday. The euro zone economy grew just 0.1% in the December quarter. And German retail sales fell 5.3% in December. Healthcare fell 0.8% and both real estate and miners lost 1.2%. Banks rose 0.6%. The continent-wide FTSEurofirst 300 index slid 0.2% but still posted the best January gain in eight years, up 6.6%. The UK FTSE 100 index also lost 0.2% on Tuesday.
US sharemarkets rose on Tuesday. Investors were encouraged by data showing the smallest gain in labour costs in a year. In response to earnings, shares in General Motors rose 8.4% and Exxon Mobil rose 2.2% but Caterpillar fell 3.5% and McDonalds fell 1.3%. At the close of trade, the Dow Jones index was up by 369 points or 1.1%. The S&P 500 index rose 1.5%. And the Nasdaq index lifted 191 points or 1.7%. In January the Dow rose by 2.8%; S&P 500 rose by 6.2%; and the Nasdaq gained 10.7% (biggest January gain for the Nasdaq since 2001).
US government bonds were firmer on Tuesday (yields lower). US 10-year treasury yields fell by 4 points to 3.51%. And US 2-year treasury yields fell by 6 points to 4.21%.
Major currencies were firmer against the US dollar in European and US trade. The Euro lifted from lows near US$1.0800 to highs near US$1.0875 and was near US$1.0870 in late US trade. The Aussie dollar lifted from lows near US69.85 cents to highs near US70.58 cents and was near the highs in late US trade. And the Japanese yen rose from near 130.49 yen per US dollar to around JPY129.77 but was near JPY130.15 in late US trade.
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Global oil prices were mixed on Tuesday. Supporting prices was data from the US Energy Information Administration showing demand for US crude and petroleum products rose to 3-month highs In November. The Brent crude oil price fell by US41 cents or 0.5% to US$84.49 a barrel. But the more actively-traded April contract rose US96 cents. And the US Nymex crude oil price rose by US97 cents or 1.2% to US$78.87 a barrel.
Base metal prices were generally firmer on Tuesday. The copper futures price rose by 0.6%. And the aluminium futures price rebounded 1.7%.
The gold futures price rose by US$6.10 or 0.3% to US$1,945.30 an ounce. Spot gold was trading near US$1,928
an ounce in late US trade. Iron ore futures rose US29 cents or 0.2% to a 7-month high of US$123.37 a tonne.
In Australia, home prices data is issued with manufacturing purchasing managers’ surveys and selected living
cost indexes. Reserve Bank officials Marion Kohler and Tom Rosewell appear before the Senate Select Committee.
In China, the Caixin manufacturing index is scheduled.
In the US, the Federal Reserve hands down its rate decision. The ADP employment report is released with construction spending data, JOLTS job openings figures and the S&P Global and ISM
Originally published by CommSec