In US economic data, mortgage applications fell by 1.9% last week after falling 0.8% in the prior week. Unit labour costs rose at a 2.4% annualised pace in the September quarter (survey: +3.1%). Productivity rose at a 0.8% annual pace in the quarter (survey: +0.6%).
European sharemarkets were weaker on Wednesday. Energy stocks led the declines, down 2% in response to lower oil prices. Banks were down 0.8%, but healthcare rose 0.7%. Euro zone gross domestic product (measure of economic growth) rose slightly more than expected, up 0.3% in the September quarter to be up 2.3% on the year. The continent-wide FTSEurofirst 300 index fell by 0.6% and the UK FTSE 100 fell by 0.4%.
US sharemarkets were mixed on Wednesday as investors struggled to find factors that could provide direction. Healthcare rose 0.8% but technology lost 0.5% with communication services down 0.9%. Shares in Apple fell 1.4% after Morgan Stanley tipped a cut to the tech giant’s iPhone shipment target. Shares in Tesla fell by 3.2% on reports that the company had cut December output of the Model Y at its Shanghai plant by more than 20%. Investors also absorbed news that Bank of Canada had lifted the overnight rate by 50 basis points to 4.25%. At the close, the Dow Jones index was up just 1.6 points or less than 0.1%. The S&P 500 index was down 0.2%. And the Nasdaq index lost 56 points or 0.5%.
US government bonds were firmer on Wednesday (yields lower). US 10-year Treasury yields fell by 10 points to near 3.41%. AndUS 2-year Treasury yields fell by 11 points to near 4.25%.Major currencies rose against the US dollar in European and US trade. The Euro rose from lows near US$1.0440 to highs near US$1.0545 and was near US$1.0510 at the US close. The Aussie dollar rose from lows near US66.70 cents to highs near US67.40 cents and was near US67.30 cents at US close. And the Japanese yen rose from 137.85 yen per US dollar to JPY136.20 and was near JPY136.45 at the US close.
Global oil prices fell by around 3% on Wednesday. Both US distillate stocks and gasoline inventories rose more than expected in the past week according to the Energy Information Administration. But providing support for prices was data showing China’s crude oil imports rose 12% in November on a year ago. China also announced further relaxation of Covid-19rules which may serve to lift oil demand. The Brent crude oil pricefell by US$2.18 or 2.7% to US$77.17 a barrel. And the US Nymex crude oil price fell by US$2.24 or 3.0% to US$72.01 a barrel.
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Base metal prices were mixed on Wednesday with copper up 1.1% and aluminium down 0.8%.
The gold futures price rose by US$15.60 an ounce or 0.9% to US$1,798.00 an ounce. Spot gold was trading near US$1,787 an ounce at the US close. Iron ore futures fell by US$1.40 atonne or 1.3% to US$107.09 a tonne.
Originally published by CommSec
