In US economic data, the ADP employment report showed that private sector jobs rose by 208,000 in September (survey: +200,000). The trade deficit narrowed from US$70.5 billion to US$67.4bn in August (survey: US$67.7bn). The ISM services index fell from 56.9 to 56.7 in September (survey: 56). The employment component of the
index rose from 50.2 to 53.0. The S&P Global services index rose from 43.7 to 49.3 in September (survey: 49.2). Mortgage applications fell 14.2% in the past week after falling 3.7% in the prior week.
European sharemarkets eased on Wednesday. The S&P Global composite purchasing managers index eased to a 20-month low of 48.1, signifying contracting activity and thus raising recession fears. And data showing firm US jobs growth suggested that the US Federal Reserve would continue to lift rates aggressively. Leading sector declines was real estate, down 4.7%, with retailers down 3.2%. The continent-wide FTSEurofirst 300 index fell by 0.9%. The UK FTSE 100 index lost 0.5%.
US sharemarkets were volatile on Wednesday after new data stifled hopes that the Federal Reserve could slow down the pace of rate hikes. Banks lost 1.4% and real estate lost 4.4% but energy rose 2.1% in response to a higher oil price. After soaring 22% on Tuesday, shares in Twitter fell by just 1.3% on Wednesday. After being down 430 points at one stage and also up by 138 points, the Dow Jones index ended lower by 42.5 points or 0.1%. The S&P 500 index fell by
0.2%. And the Nasdaq index lost 28 points or 0.3%.
US longer-term treasuries fell on Wednesday (yields higher). Data showing a solid lift in employment suggested that the Federal Reserve will maintain its aggressive monetary policy. US 10-year yields rose by around 13 points to near 3.745%. And US 2-year yields rose by 5 points to near 4.145%.
Major currencies were mixed against the US dollar in European and US trade. The Euro fell from highs near US$0.9993 to lows near US$0.9835 and was near US$0.9885 at the US close. The Aussie dollar fell from highs near US65.20 cents to lows near US64.15 cents and was near US65.00 cents at the US close. And the Japanese yen eased from near 144.00 yen per US dollar to JPY144.82 and was near JPY144.55 at the US close.
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Global oil prices rose by around 1.5% on Wednesday. OPEC+ oil producers agreed to a 2 million barrel per day (mbd) cut in production quotas. And new data showed that US crude and fuel inventories fell last week. While the cut in quotas could boost oil prices, in August OPEC+ missed its production target by 3.58 mbd as several countries
were already pumping well below their existing quotas. The Brent crude oil price rose by US$1.57 or 1.7% to US$93.37 a barrel. And the US Nymex crude oil price lifted by US$1.24 or 1.4% to US$87.76 a barrel.
Base metal prices were firmer on the London Metal Exchange on Wednesday. Lead was up the most, lifting 6%. But copper fell 1% and aluminium gained just 0.1% with zinc up 0.2%.
The gold futures price fell by US$9.70 an ounce or 0.6% to US$1,720.80 an ounce. Spot gold was trading near US$1,714 an ounce at the US close. Iron ore futures rose by US5 cents or 0.1% to US$95.26 a tonne.
Originally published by CommSec