In US economic data, initial jobless claims fell by 12,000 to 214,000 in the past week (survey: 233,000). Existing home sales dipped 1.5% in September to a 4.71 million annualised rate (survey: 4.7m). The Conference Board leading index fell by 0.4% in September (survey: -0.3%). The Philadelphia Federal Reserve manufacturing index rose from -9.9 to -8.7 in October (survey: -5).
European sharemarkets advanced on Thursday after Liz Truss resigned as UK Prime Minister. Truss’s package of fiscal policies, had caused havoc in financial markets due to their mix of tax cuts and higher spending, forcing the Bank of England to intervene. The UK FTSE 100 index rose by 0.3%. And the continent-wide FTSEurofirst 300 index added 0.2%, though gains were capped after data showed that German producer prices soared by 45.8% in September on the same month last year (survey: 45.4%).
US sharemarkets fell on Thursday after hawkish remarks from US Federal Reserve officials prompted another surge in US government bond yields. Earnings results were mixed with Tesla’s (-6.7%) sales disappointing, but IBM (+4.7%), AT&T (+7.7%) and chemicals giant Dow (-0.4%) all topped analysts’ forecasts. Shares of insurer Allstate
dropped 12.9% as its third quarter was impacted by Hurricane Ian. The Dow Jones index fell by 90 points or 0.3%. The S&P 500 index dipped 0.8%. The Nasdaq index shed 66 points or 0.6%.
US treasuries weakened on Thursday (yields higher) after the release of solid jobs data reinforced investor bets that the US Federal Reserve would keep raising interest rates aggressively. Philadelphia Fed President Patrick Harker said policymakers are likely to raise interest rates “well above” 4% this year. Fed Governor Lisa Cook said that rates will need to keep rising to get inflation under control. US 10- year yields rose by around 11 points to near 4.23%, the highest since June 2008. And US 2-year yields lifted by around 6 points to 15-year highs near 4.61%.
Major currencies were mostly firmer against the US dollar in European and US trade. The Euro rose from lows near US$0.9772 to highs near US$0.9844 and was near US$0.9780 at the US close. The Aussie dollar rose from lows near US62.48 cents to highs near US63.54 cents and was near US62.80 cents at the US close. But the Japanese yen eased from 149.55 yen per US dollar to JPY150.28 and was near JPY150.15 at the US close.
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Global oil prices were mixed on Thursday following a drop in broader equity markets, countering earlier market optimism that China may ease Covid-19 quarantine measures for visitors, potentially boosting fuel demand. The Brent crude oil price fell by US3 cents or less than 0.1% to US$92.38 a barrel. But the US Nymex crude oil price added US43 cents or 0.5% to US$85.98 a barrel.
Base metal prices were mostly higher on Thursday. Aluminium prices lifted 1.8% as inventories slipped and investors hoped that China would ease its strict Covid-19 restrictions. Zinc was the top performer, up 3% with copper 2.5% higher, but lead fell by 0.9%.
The gold futures price rose by US$2.60 an ounce or 0.2% to US$1,636.80 an ounce. Spot gold was trading near US$1,627 an ounce at the US close. Iron ore futures fell by US10 cents or 0.1% to US$94.76 a tonne.
Originally published by CommSec
