In US economic data, the NFIB small business optimism index was unchanged at 93.2 in April (survey: 92.9).
European sharemarkets rose from two-month lows on Tuesday. The pan-European STOXX 600 index rose by 0.7%, led higher by financial services stocks which rose 1.4%. Germany’s ZEW institute survey showed economic expectations lifting from -41 to -34.3 for May (survey: -43.5). The German Dax index added 1.2% and the UK FTSE index gained 0.4%. In London trade, shares in Rio Tinto fell by 0.5% and shares in BHP slid 0.8%.
US sharemarkets were mixed on Tuesday. Traders assessed comments from several US Federal Reserve speakers including Cleveland Federal Reserve President Loretta Mester who said, “we don’t rule out 75 [basis point rate hikes] forever.” Shares of Apple rose by 1.6%, boosting the S&P 500 and Nasdaq indexes. Tesla shares were also up 1.6%. But IBM shares slipped 4%. Peloton shares tumbled 8.7% after its CEO said the fitness equipment maker was “thinly capitalised.” The Dow Jones index closed down by 85 points or 0.3% after being up 506 points earlier in the session. But the S&P 500 index rose by 0.3% and the Nasdaq index added 114 points or 1%.
US treasuries rose on Tuesday (yields lower) ahead of key US inflation data on Wednesday. New York Federal Reserve President John Williams reaffirmed US Federal Reserve Chair Jerome Powell’s plans to raise interest rates by 50 basis points at each of its next two policy meetings. The US Treasury sold US$45 billion of 3-year notes at a yield of 2.809% into solid demand. US 10-year yields fell by around 9 points to near 2.99%. And US 2-year yields edged lower by around 1 point to near 2.61%.
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Major currencies were mostly weaker against the US dollar in European and US trade. The Euro fell from highs near US$1.0578 to lows near US$1.0525 and was near US$1.0530 at the US close. The Aussie dollar fell from highs near US69.82 cents to lows near US69.13 cents and was near US69.40 cents at the US close. But the Japanese yen firmed from 130.49 yen per US dollar to JPY129.86 and was near JPY130.40 at the US close.
Global oil prices dropped 3% on Tuesday. The US crude oil price dipped below US$100 a barrel as the demand outlook was pressured by coronavirus lockdowns in China and growing recession risks. And a strong US dollar made crude more expensive for buyers using other currencies. The Brent crude price fell by US$3.48 or 3.3% to US$102.46 a barrel. And the US Nymex crude price dipped US$3.33 or 3.2% to US$99.76 a barrel.
Base metal prices mostly fell on Tuesday due to mounting concerns about demand around the world. Tin fell by 4.3% with lead 1.9% lower. But aluminium was flat and nickel was up 0.8%.
The gold futures price fell by US$17.60 or 0.9% to US$1,841 an ounce. Spot gold was trading near US$1,837 an ounce at the US close. The iron ore futures price fell by US$1.72 or 1.3% to US$130.27 a tonne on speculation that Chinese real estate developer Sunac China Holdings could default on its dollar bonds. Ahead: In Australia, data on consumer confidence and job vacancies are both issued. Chinese and US inflation data are both scheduled.
Originally published by CommSec