In US economic data, housing starts fell by 0.5% in November to a 1.43 million annualised rate (survey: 1.4 million). Building permits decreased by 11.2% in November to a 1.34 million annualised pace (survey: 1.48 million).
European sharemarkets were mixed on Tuesday. Major indexes caught markets off guard by widening its cap on 10-year Japanese government bond yields. Real estate stocks led losses with a 2.2% fall, while banks rose by 1.7%. Data showing a larger-than-expected 3.9% drop in German producer prices in November (survey: -1.7%) did little to calm market jitters. The continent-wide FTSEurofirst 300 index fell by 0.3%. But the UK FTSE 100 index edged up by 0.1%, supported by shares of copper miner Antofagasta (+3.2%).
US sharemarkets snapped a four day losing streak on Tuesday. Energy (+1.5%) and financial (+0.3%) stocks led gains after the Bank of Japan tweaked its monetary policy in a surprise move that would allow long-term interest rates to rise more. Shares of drug maker Moderna rose 5.9% after the stock was upgraded by broker Jefferies to “buy” from “hold”. Miner Newmont’s shares jumped 4.4% as the price of gold climbed. But Tesla shares lost 8.1% after several brokerages cut the electric vehicle maker’s target price on growing concerns of demand weakness. Shares of food producer General Mills dropped 4.6%, despite reporting better-than-expected quarterly revenue and profits. At the close of trade, the Dow Jones index rose by 92 points or 0.3%. The S&P 500 index lifted by 0.1% and the Nasdaq index added just 1 point or less than 0.1%.
Longer-dated US government bonds fell on Tuesday (yields higher) after the Bank of Japan surprised markets by widening the band of its yield curve control, sparking a sell-off in bonds globally. US 10-year Treasury yields rose by around 11 points to near 3.68%. US 2-year Treasury yields were steady near 4.27%.
Major currencies were stronger against the US dollar in European and US trade. The Euro rose from lows near US$1.0577 to highs near US$1.0653 and was near US$1.0620 at the US close. The Aussie dollar lifted from lows near US66.28 cents to highs near US66.96 cents and was near US66.75 cents at the US close. The Japanese yen rose from 133.62 yen per US dollar to JPY130.65 and was near JPY131.70 at the US close after the Bank of Japan decided to let long-term bond yields move 50 basis points either side of its 0% target, wider than the previous 25 basis point band.
Top Australian Brokers
Global oil prices swung on Tuesday in a session marked by waning liquidity ahead of the holiday season, as traders weighed a weaker US dollar and winter supply disruptions in the US against a potential boost in crude demand after China relaxed its “Covid Zero” policy. The Brent crude oil price rose by US19 cents or 0.2% to US$79.99 a barrel. And the US Nymex crude oil price gained US90 cents or 1.2% to US$76.09 a barrel.
Base metal prices climbed on Tuesday. Aluminium rose by 0.5%, helped by a weakening US dollar and a sharp fall in inventories available on the London Metal Exchange. Copper was up by 0.6%.
The gold futures price rose by US$27.70 an ounce or 1.5% to US$1,825.40 an ounce. Spot gold was trading near US$1,818 an ounce at the US close. Iron ore futures lifted US30 cents a tonne or 0.3% to US$109.86 a tonne.
Ahead: In Australia, detailed skilled job vacancies data is issued. In the US, existing home sales figures are scheduled with the weekly MBA mortgage applications data, current quarterly account balance and the Conference Board consumer confidence index.
Originally published by CommSec