In US economic data, the New York State Empire manufacturing index fell from -11.2 to -32.9 in January (survey: -8.7), the lowest level since May 2020.
European share markets closed mostly higher on Tuesday, ending at 9-month highs, after a report said the European Central Bank’s (ECB) policymakers were considering a slower pace of interest rate hikes. The ZEW Institute’s economic sentiment index rose from -23.3 to +16.9 in January (survey: -15), pointing to a milder German recession than initially feared. Mining shares led gains, up 1.1%. The continent-wide FTSEurofirst 300 index lifted 0.4%, but the UK FTSE 100 index dipped 0.1%. Shares of grocer Ocado Group fell 9.3% after its online joint venture Ocado Retail warned it would not return to profit until the second half of its financial year.
US share markets were mixed in a volatile trading session on Tuesday. Shares of Goldman Sachs slid 6.4% after the bank reported a bigger-than-expected drop in quarterly profit, dragging on the Dow Jones index. Insurer Travelers Companies shares fell 4.6% after forecasting fourth-quarter earnings below estimates. But shares of Morgan Stanley jumped 5.9% after the bank beat analysts’ estimates for fourth-quarter profit as its trading business got a boost from market volatility. And Tesla shares gained 7.4% after the electric-vehicle maker’s January retail sales surged in China following recent price cuts on its topselling models. At the close of trade, the Dow Jones index fell 392 points or 1.1%. The S&P 500 index lost 0.2%. But the Nasdaq index added 16 points or 0.1%.
Longer-dated US government bonds fell on Tuesday (yields higher) in choppy trading as investors awaited the outcome of the -day meeting on Wednesday and prepared for the likelihood of an increase in US corporate debt supply. US 10-year Treasury yields rose 4 points to near 3.55%. But US 2- year yields dipped 4 points to near 4.20%.
Major currencies were mostly stronger against the US dollar in European and US trade. The Euro fell from highs near US$1.0867 to lows near US$1.0773 and was near US$1.0790 at the US close. But the Aussie dollar rose from lows near US69.30 cents to highs near US69.96 cents and was near US69.85 cents at the US close. And the Japanese yen firmed from near 129.11 yen per US dollar to around JPY128.01 and was near JPY128.25 at the US close.
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Global oil prices rose on Tuesday after China posted weak but market expectation-beating annual economic growth data and on hopes that a recent shift in its Covid policy will boost fuel demand. The Brent crude oil price rose US$1.46 or 1.7% to US$85.92 a barrel. And the US Nymex crude oil price added US32 cents or 0.4% to US$80.18 a barrel.
Base metal prices advanced on Tuesday, supported by a softer US dollar. The US copper futures price rose 0.3% to a 7-month high as traders bet Chinese demand will rise later in the year, but weak economic data underlined how low consumption remains in the near term. The US aluminium futures price rose by 1%.
The gold futures price slid US$11.80 or 0.6% to US$1,909.90 an ounce. Spot gold was trading near US$1,908 an ounce at the US close. Iron ore futures dipped US$1.38 a tonne or 1.1% to US$120.95 a tonne, as weak economic data
from top steel producer China dented demand sentiment.
Ahead: In Australia, building activity data is released. The Bank of Japan hands down its policy decision. US data on retail sales, producer prices, industrial production and business inventories are all due with the NAHB housing market index and US Federal Reserve’s Beige Book.
Originally published by CommSec