In US economic data the producer price index (PPI) rose by 0.4% in September (survey: +0.2%). Annual growth eased from 8.7% to 8.5%. The core measure (excludes food and energy) rose by 0.3% (survey: 0.3%). Annual growth of the core PPI was steady at 7.2% (survey: 7.3%).
According to minutes of the last Federal Reserve policy-making committee “participants observed that it would be appropriate at some point to slow the pace of rate increases while assessing the cumulative effects of policy adjustments.” But also “many participants raised their assessment of the fed funds path needed to achieve committee goals.”
European sharemarkets eased for a sixth straight day on Wednesday. Credit Suisse fell by 4.2% after Bloomberg reported the US Justice Department is investigating whether the Swiss lender continued helping US clients hide assets from authorities, eight years after it paid a $2.6-billion tax evasion settlement. The continent-wide FTSEurofirst 300 index lost 0.5%. The UK FTSE 100 index lost 0.9%.
US sharemarkets eased on Wednesday, with investors absorbing the latest economic news. The focus is now on the consumer price index data on Thursday. Shares in PepsiCo gained 4.2% after the soft-drinks maker raised its annual revenue and profit forecasts. The Dow Jones index fell by 28 points or 0.1%. The S&P 500 index fell by 0.3%. And the Nasdaq index lost 9 points or 0.1%.
US long-term treasuries rose on Wednesday (yields lower) as traders absorbed the business inflation data and minutes from the September 20-21 Federal Reserve policymaking committee. A US$32 billion auction of US10-year bonds went at an average yield of 3.93%. US 10-year yields fell by 4 points to 3.90%. And US 2-year yields fell by 3 points to near 4.29%.
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Major currencies were mixed against the US dollar in European and US trade. The Euro fell from US$0.9730 to US$0.9665 and was near US$0.9700 at US close. The Aussie dollar rose from lows near US62.40 cents to near US62.95 cents and was near US62.75 cents at the US close. And the Japanese yen eased from 146.05 yen per US dollar and JPY146.97 and was near JPY146.85 at the US close.
Global oil prices fell for a third day, down by around 2.0% on Wednesday. OPEC cut its outlook for demand growth this year by between 460,000 barrels per day (bpd) and 2.64 million bpd. Also the US Energy Department lowered its expectations for both production and demand in the US. The Brent crude oil price fell by US$1.84 or 2.0% to US$92.45 a barrel. And the US Nymex crude oil price fell by US$2.08 or 2.3% to US$87.27 a barrel.
Base metal prices were mixed on the London Metal Exchange on Wednesday. Tin, copper and zinc fell by as much as 2.1%. Other metals rose by between 0.9-3.8% with aluminium up the most on reports that the US was considering banning Russian aluminium in response to Moscow’s escalation in Ukraine.
The gold futures price fell by US$8.50 an ounce or 0.6% to US$1,677.50 an ounce. Spot gold was trading near US$1,674 an ounce at the US close. Iron ore futures fell by US84 cents or 0.9% to US$96.13 a tonne.
Originally published by CommSec