In US economic data, initial jobless claims fell 15,000 to 190,000 last week (survey: 214,000). The Philadelphia Fed
manufacturing index rose from -13.7 to -8.9 in January (survey: – 11). Housing starts fell 1.4% in December to a 1.38 million annualised rate (survey: 1.36m). Building permits dropped 1.6% in December to a 1.33 million annualised pace (survey: 1.37m).

European sharemarkets tumbled on Thursday, breaking a sixday winning streak, falling the most since December 15. Ratesensitive technology shares led losses, down 2.9%, after European Central Bank President Christine Lagarde and fellow policymaker Klaas Knot said investors were underestimating the central bank’s determination to bring inflation back to its 2% target. The continent-wide FTSEurofirst 300 index slid 1.5% and the UK FTSE 100 index dipped 1.1%.

US sharemarkets fell on Thursday after data pointing to a tight US labour market fuelled concerns the US Federal Reserve will maintain its aggressive path of rate hikes. American Express, the only major US card company with credit exposure and highly sensitive to higher rates, fell 2.4%. Amazon.com (-1.9%) and Microsoft (-1.7%) were among the biggest drags on the market after announcing recent plans to cut thousands of jobs. Shares of Procter & Gamble fell 2.1% after warning of commodity costs pressuring profits. At the close of trade, the Dow Jones index fell
252 points or 0.8%. The S&P 500 index lost 0.8%. And the Nasdaq index shed 105 points or 1%.

US government bonds retreated on Thursday (yields higher) as investors assessed the latest US job numbers and comments from US Federal Reserve speakers. Fed Vice Chair Lael Brainard said the central bank is still “probing” for the level of interest rates that will be adequate to tame inflation. The US Treasury sold US$17 billion of 10-year Treasury Inflation Protected Securities (TIPS) at a yield of 1.22% into strong demand. US 10-year Treasury yields
rose 2 points to 3.40%. US 2-year yields lifted 4 points to 4.12%.

Major currencies were mostly stronger against the US dollar in European and US trade. The Euro rose from US$1.0782 to US$1.0838 and was near US$1.0830 at the US close. The Aussie dollar lifted from US68.72 cents to US69.22 cents and was near US69.10 cents at the US close. But the Japanese yen fell from 127.77 yen per US dollar to JPY128.75 and was near JPY128.40 at the US close.

 

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Global oil prices rose as much as 1.4% on Thursday as investors bet China’s demand revival would sustain the crude market, shrugging off a lift in US stockpiles. US crude inventories gained last week by the most since June 2021, rising by 8.4 million barrels, according to the US Energy Information Administration. The Brent crude oil price rose US$1.18 or 1.4% to US$86.16 a barrel. The US Nymex crude oil price added US85 cents or 1.1% to US$80.33 a barrel.

Base metal prices were mixed on Thursday. The US aluminium futures price fell 2.1% as renewed investor concerns about global growth blunted demand optimism. But the US copper futures price edged higher by 0.1%.

The gold futures price rose US$16.90 or 0.9% to US$1,923.90 an ounce. Spot gold was trading near US$1,932 an ounce at the US close. Iron ore futures rose US60 cents a tonne or 0.5% to US$121.79 a tonne after BHP Group said it expected China’s economic recovery to boost demand.

Ahead: In Australia, business turnover data is released. The People’s Bank of China announces loan prime rates. In the US, existing home sales figures are due. Fed Governor Chris Waller and Philadelphia Fed President Patrick Harker are scheduled to speak. Oil services giant SLB issues earnings.

Originally published by CommSec