In US economic data, initial jobless claims fell by 5,000 to 232,000 in the past week (survey: 248,000). Construction spending fell by 0.4% in July (survey: -0.2%). The ISM manufacturing index was unchanged at 52.8 in August (survey: 51.9). According to Challenger, job cuts fell by 21.0% in August to 20,485 (survey: 29,000).
European sharemarkets fell on Thursday, with the pan-European STOXX 600 index down by 1.8%. Basic resources stocks tumbled 3.8% as China reimposed Covid-19 restrictions. The German Dax index slid 1.6%, despite German retail sales unexpectedly lifting 1.9% in July (survey: -0.1%). The UK FTSE index dipped 1.9% as mining stocks dragged the commodity-heavy index lower. In London trade, shares in Rio Tinto fell by 3.4% and shares in BHP dropped 8.8% after trading ex-dividend.
US sharemarkets closed mostly higher Thursday, snapping a fourday losing streak. The Dow Jones index recovered from a 290 point drop earlier in the session, as traders weighed the potential for high interest rates against robust US factory and jobs data. Defensive health care companies led gains with Merck shares up 2.1% and Johnson & Johnson shares 2.5% higher. But shares of Nvidia (-7.7%) and Advanced Micro Devices (-3.0%) dropped after the US imposed an export ban on some major artificial intelligence chips to China. At the close of trade, the Dow Jones index rose by 146 points or 0.5%. And the S&P 500 index gained 0.3%, but the Nasdaq index lost 31 points or 0.3%.
US treasuries were weaker on Thursday (yields higher) as investors anticipated a strong US job report on Friday that could spur further aggressive monetary tightening by the US Federal Reserve to combat four decade high inflation. US 10-year yields rose by around 13 points to near 3.26%. And US 2-year yields rose by around 6 points to near 3.51% – near 15-year highs.
Major currencies were weaker against the US dollar in European and US trade. The Euro fell from highs near US$1.0045 to lows near US$0.9911 and was near US$0.9940 at the US close. The Aussie dollar fell from highs near US68.43 cents to lows near US67.70 cents and was near US67.85 cents at the US close. And the Japanese yen
eased from near 139.07 yen per US dollar to JPY140.21 and was near JPY140.15 at the US close.
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Global oil prices shed over 3% on Thursday as new Covid-19 lockdown measures in China added to worries that high inflation and interest rate hikes are denting fuel demand. The Brent crude oil price fell by US$3.28 or 3.4% to US$92.36 a barrel. The US Nymex crude oil price slid US$2.94 or 3.3% to US$86.61 a barrel.
Base metals tumbled on Thursday after factory activity in China, the world’s biggest metals consumer, shrank in August due to a crisis in the property sector. Renewed Covid-19 lockdowns in China also pushed tin 7.6% lower with copper down 2.5%.
The gold futures price fell by US$16.90 an ounce or 1.0% to US$1,709.30 an ounce. Spot gold was trading near US$1,695 an ounce at the US close. Iron ore futures slid US$8.37 or 8.0% to US$96.39 a tonne after the lockdown of Chengdu revived fears that the virus will continue to hamper China’s economic recovery. Ahead: In the US, employment and factory orders data are due.
Originally published by CommSec