In US economic data, the producer price index (PPI) fell by 0.1% in August after a 0.4% fall in July (survey: -0.1%) but was up by 8.7% on the year (survey: +8.8%). The core PPI (ex-food and energy) rose by 0.4% in August (survey: +0.3%) to be 7.3% higher on a year ago (survey: +7.1%). MBA mortgage applications fell by 1.2% in the past week after falling by 0.8% in the previous week.

European sharemarkets fell again on Wednesday on fears for higher interest rates in the US. The mining sector fell by 2.3% while industrials fell 1.5%. But retailing rose by 0.7% with energy up 0.8%. Overall, the pan-European STOXX 600 index lost 0.9%. The German Dax index fell by 1.2% and the UK FTSE index slid by 1.5%. In London trade, shares in both Rio Tinto and BHP lost 2.3%.

US sharemarkets were volatile on Wednesday but ended higher. The Dow Jones index straddled a 392-point range. The producer price data largely met forecasts but there is debate about whether the Federal Reserve will lift rates by 75 or 100 basis points next week. Shares in Starbucks lifted 5.5% after the company raised its threeyear profit and sales outlook. The Dow Transport index lost 1% on fears of rail strikes. Shares in Union Pacific fell by 3.7%. At the close of trade, the Dow Jones index ended trade higher by 30 points or 0.1%. The S&P 500 index rose by 0.3% and the Nasdaq index gained 86 points or 0.7%.

US treasuries were mixed on Wednesday. US 10-year yields fell by 1 point to near 3.41%. And US 2-year yields rose by 4 points to 14- year highs near 3.80%.

Major currencies were mixed against the US dollar in European and US trade. The Euro rose from near US$0.9960 to highs near US$1.0020 and was near US$0.9975 at the US close. The Aussie dollar rose from US67.05 cents to highs near US67.60 cents and was near US67.45 cents at the US close. And the Japanese yen rose from near 143.89 yen per US dollar to JPY142.56 and was near JPY143.15 at the US close.

 

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Global oil prices rose on Wednesday. The International Energy said it expects widespread switching from gas to oil for heating purposes, saying it will average 700,000 barrels per day (bpd) in October 2022 to March 2023 – double the level of a year ago. But soft Chinese demand for oil is expected to continue. The Brent crude oil price rose by US93 cents or 1.0% to US$94.10 a barrel. And the US Nymex crude oil price lifted by US$1.17 or 1.3% to US$88.48 a barrel.

Base metals were mixed on Wednesday. Lead and zinc rose by as much as 0.3% but other metals fell with aluminium down 1.8%.

The gold futures price fell by US$8.30 an ounce or 0.5% to US$1,709.10 an ounce. Spot gold was trading near US$1,695 an ounce at the US close. Iron ore futures fell by US$1.62 or 1.6% to US$100.51 a tonne.

Ahead: In Australia, employment data is issued. In the US, retail sales and industrial production figures are released alongside import and export prices. And the Philadelphia Federal Reserve index and the Empire State manufacturing index are both issued with business
and retail inventories and the usual weekly data on claims for unemployment insurance (initial jobless claims).

Originally published by CommSec