In US economic data the Business Optimism index rose from 91.8 to 92.1 in September (survey: 91.2). But the Economic Optimism index fell from 44.7 to 41.6 in October (survey: 43.0). Consumer inflation expectations eased from 5.7% to 5.4% in September). The Redbook measure of chain store sales was up 8.3% on a year ago, down from the 12.3% annual gain in the prior week.
The International Monetary Fund cut its forecast for global economic growth in 2023 from 2.9% to 2.7%. This year the global economy is estimated to grow by 3.2 per cent.
European sharemarkets eased for a fifth straight session on Tuesday on persistent concerns about the risk of global recession. The chemicals sector fell by 2.5% while the retail sector was best performing, up 0.75%. Data showed that the UK jobless rate fell to 3.5% in the August quarter, the lowest level since 1974. The Bank of England also announced that it would expand its emergency buying of government bonds to include inflation-linked debt. The continent-wide FTSEurofirst 300 index fell by 0.6%. The UK FTSE 100 index lost 1.1%.
US sharemarkets eased in late trade on Tuesday with indications that the Bank of England would support the country’s bond market for just three more days. The S&P bank index fell 2.6% ahead of key bank profit results on Friday. After being up 405 points earlier in the session, the Dow Jones index ended higher by 36 points or 0.1%. The S&P 500 index fell by 0.7%. And the Nasdaq index lost 116 points or 1.1%.
US long-term treasuries fell on Tuesday (yields higher). Federal Reserve Bank of Cleveland President Loretta Mester said on Tuesday that the central bank had yet to get inflation under control despite aggressive interest rate hikes. A US$40 billion auction of US3-year bonds went at an average yield of 4.318% to tepid demand. US 10-year yields rose by 5 points to 3.94%. And US 2-year yields rose by 1 point to near 4.31%.
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Major currencies were mixed against the US dollar in European and US trade. The Euro held between US$0.9670 and US$0.9775 and was near US$0.9705 at US close. The Aussie dollar held between US62.45 cents near US63.45 cents and was near US62.70 cents at US close. And the Japanese yen held between 145.40 yen per US dollar and JPY145.90 and was near JPY145.80 at US close.
Global oil prices fell by around 2.0% on Tuesday on global recession fears. Fears of weaker oil demand in China also weighed on prices. Chinese authorities have stepped up Covid testing in Shanghai and other large cities as infections rise again. The Brent crude oil price fell by US$1.90 or 2.0% to US$94.29 a barrel. And the US Nymex crude oil price fell by US$1.78 or 2.0% to US$89.35 a barrel.
Base metal prices were mixed on the London Metal Exchange on Tuesday. Nickel, zinc and aluminium fell by as much as 1.6%. Lead, tin and copper rose by as much as 1.6%.
The gold futures price rose by US$10.80 an ounce or 0.6% to US$1,686 an ounce. Spot gold was trading near US$1,675 an ounce at the US close. Iron ore futures fell by US38 cents or 0.4% to US$96.97 a tonne.
Originally published by CommSec