In US economic data, the ADP report showed a 132,000 lift in private sector payrolls in August after posting a 268,000 rise in July (survey: +288,000). Mortgage applications fell 3.7% in the past week after falling 1.2% in the prior week. The Chicago purchasing managers index rose from 52.1 to 52.2 in August (survey: 52.0).
European sharemarkets fell on Wednesday. Euro zone inflation hit record highs of 9.1% in August. Also there were energy concerns after Russia began shutting down gas flows to Germany via the Nord Stream 1 pipeline. Energy stocks fell by 2.6%. The pan-European STOXX 600 index fell by 1.1% to be down 5.1% over the month. The German Dax index fell by 1.0% and the UK sharemarket fell by 1.1%. Shares in Rio Tinto fell by 0.9% and shares in BHP fell by 1.6%.
US sharemarkets fell for a fourth straight session on Wednesday The Philadelphia SE semiconductor index lost 0.6% after Seagate (- 3.5%) slashed its first-quarter earnings expectations. Shares in HP Inc lost 7.7% after the PC maker reported weak earnings results. At the close of trade, the Dow Jones index was lower by 280 points or 0.9%. The S&P 500 index fell by 0.8% and the Nasdaq index lost 67 points or 0.6%. In August the Dow lost 4.1%; S&P 500 fell 4.2%; and Nasdaq fell 4.6%.
US treasuries were weaker on Wednesday (yields higher). Federal funds futures traders have priced in a 70% chance of a 75 basis points interest rate hike at the Fed’s next policy meeting on September 20. US 10-year yields rose by 7 points to near 3.18%. And US 2-year yields rose 2 points to near 3.48% after earlier hitting a 15- year high of 3.5%.
Major currencies were mixed against the US dollar in European and US trade. The Euro rose from lows near US$0.9970 to highs near US$1.0075 and was near US$1.0045 at the US close. The Aussie dollar fell from highs near US69.05 cents to lows near US68.40 cents and was near session lows at the US close. And the Japanese yen eased from 138.30 yen per US dollar to JPY138.98 and ended US trade near the weakest levels.
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Global oil prices fell by around 2.5% on Wednesday in response to on-going worries about the potential for weaker global oil demand. On the other side of the equation, OPEC and US oil supply are at the highest levels since April 2020. The Brent crude oil price fell by US$2.82 or 2.8% to US$96.49 a barrel. And the US Nymex crude oil price fell by US$2.09 or 2.3% to US$89.55 a barrel.
Base metals fell by as much as 3.7% on the London Metal Exchange on Wednesday with tin down the most. But nickel bucked the trend, up 0.2% with copper down just 0.6%.
The gold futures price fell by US$10.10 an ounce or 0.6% to US$1,726.20 an ounce. Spot gold was trading near US$1,711 an ounce at the US close. Iron ore futures rose by US27 cents or 0.3% to US$104.76 a tonne.
Ahead: In Australia, business investment data is released with purchasing manager indexes (PMIs), home prices and lending indicators such as home loans. In the US, Challenger job cuts is released with the ISM and S&P Global PMIs, unit labour costs, productivity, construction spending and weekly data on claims for unemployment insurance.
Originally published by CommSec