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In US economic data, the S&P/Case Shiller home price index was up 20.5% in the year to May (survey: 20.6%). New home sales fell from a 642,000 annual rate to 590,000 million in June (survey: 660,000). Consumer confidence fell from 98.7 to 95.7 in July (survey: 97.2). The Richmond Federal Reserve manufacturing index lifted from -11.0 points to zero in July (survey: -6).

The International Monetary Fund has cut its forecast for global economic growth in 2022 from 3.6% to 3.2%.

European sharemarkets were mixed on Tuesday. Strength in defensive sectors like healthcare and food and beverages offset weakness in retailers – the latter dragged down by a profit warning from US retail giant Walmart. The European Union also approved an emergency plan to cut gas demand. The pan-European STOXX 600 index ended flat. The German Dax index fell by 0.9%. And the UK FTSE index ended flat. In London trade, shares of Rio Tinto fell by 0.5% but BHP shares rose by 0.1%.

US sharemarkets were weaker on Tuesday. Shares in retail giant Walmart fell 7.6% after delivering a profit warning. Investors were also nervous ahead of the interest rate decision. But shares in Coca Cola (+1.6%) and McDonalds (+2.7%) rose after releasing earnings results. The Dow Jones index lost 228.5 points or 0.7%; the S&P 500 index fell by 1.2%; and the Nasdaq index lost 220 points or 1.9%.

US treasuries were mixed on Tuesday. US Treasury sold $46 billion of five-year notes on Tuesday at a yield of 2.86%. US Treasury will sell $38 billion of seven-year debt on Thursday. US 10- year yields fell by around 2 points to near 2.80%. And US 2-year yields rose by around 2 points to near 3.06%.

Major currencies were weaker against the US dollar in European and US trade. The Euro fell from highs near US$1.0230 to lows near US$1.0105 and was near US$1.0120 at the US close. The Aussie dollar fell from highs near US69.70 cents to lows near US69.20 cents and was near US69.30 cents at the US close. And the Japanese yen held between 136.30 yen per US dollar and JPY136.85 and was at JPY136.82 at the US close.

Global oil prices fell on Tuesday by as much as 1.8%. The US Biden administration said that it would sell another 20 million barrels of crude oil from the Strategic Petroleum Reserve. The Brent crude price fell by US75 cents or 0.7% to US$104.40 a barrel. And the US Nymex crude price fell by US$1.72 or 1.8% to US$94.98 a barrel.

Base metal prices were mixed on Tuesday. Nickel fell 3% and tin fell 1.2%. But other metals rose by up to 2.7% with zinc up the most.

The gold futures price fell by US$1.40 an ounce or 0.1% to US$1,717.70 an ounce. Spot gold was trading near US$1,717 an ounce at the US close. The iron ore futures price rose by US$1.34 or 1.3% to US$106.35 a tonne.
Ahead: In Australia, the Consumer Price Index is released. In China industrial profits data is issued. In the US the Federal Reserve hands down its rates decision. Data is released on durable goods orders, pending home sales and the goods trade balance.

Published by CommSec