In US economic data, industrial production rose by 0.6% in July (survey +0.3%). Housing starts fell by 9.6% in July to a 1.446 million annualised rate (survey: 1.527m). Building permits declined by 1.3% in July to a 1.674 million annualised rate (survey: 1.64m).
European sharemarkets closed higher for a fifth straight session on Tuesday. The pan-European STOXX 600 index rose by 0.2% with basic resources shares up 3.2%. The German Dax index lifted 0.7% despite Germany’s ZEW economic sentiment index declining from – 53.8 to -55.3 in August (survey: -52.7). The UK FTSE index gained 0.4%. In London trade, shares of Rio Tinto rose by 3.9% and BHP shares jumped 5.5% after stellar results.
US sharemarkets were mixed on Tuesday. Shares of Walmart climbed 5.1% after the retailer forecast a smaller drop in full-year profit than previously projected. Home improvement retailer Home Depot surpassed estimates for quarterly sales with its share price up 4.1%. But rising US government bond yields weighed on high-growth technology shares. The Dow Jones index closed higher for a fifth day, up by 240 points or 0.7%. The S&P 500 index rose by 0.2%. But the Nasdaq index dipped by 25.5 points or 0.2%.
US treasuries fell on Tuesday (yields higher) as encouraging results from American retail giants suggested the US Federal Reserve has room to further tighten financial conditions as it battles
four-decade high inflation. US 10-year yields rose by around 2 points to near 2.81%. And US 2-year yields lifted by around 7 points to near 3.27%.
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Major currencies were mixed against the US dollar in European and US trade. The Euro rose from lows near US$1.0121 to highs near US$1.0191 and was near US$1.0170 at the US close. But the Aussie dollar eased from highs near US70.38 cents to lows near US69.90 cents and was near US70.25 cents at the US close. And the Japanese yen dipped from near 133.25 yen per US dollar to JPY134.65 and was near JPY134.25 at the US close.
Global oil prices fell by around 3% on Tuesday. Crude prices hit 6- month lows as traders weighed the prospects for increasing Iranian crude exports with a worsening outlook for global economic growth. The Brent crude price fell by US$2.76 or 2.9% to US$92.34 a barrel, its lowest level since February 10. And the US Nymex crude price lost US$2.88 or 3.2% to US$86.53 a barrel, its lowest level since January 25.
Base metal prices were mixed on Tuesday. Zinc rose by 3.1% on supply concerns after production was suspended at Nyrstar’s smelter in the Netherlands due to high power prices. Lead fell by 0.7%.
The gold futures price fell by US$8.40 an ounce or 0.5% to US$1,789.70 an ounce. Spot gold was trading near US$1,775 an ounce at the US close. Iron ore futures fell by US16 cents or 0.1% to US$106.63 a tonne as traders weighed curbs in electricity consumption in China’s Sichuan province that hit steel production.
Ahead: In Australia, the Wage Price Index (WPI) is issued. In the US, retail sales and business inventories data are released with minutes from the July 26-27 Federal Reserve (FOMC) meeting. The Reserve Bank of New Zealand (RBNZ) hands down its policy decision.
Published by CommSec