In US economic data, the NAHB housing market index fell from 33 to 31 in December (survey: 34), the lowest since June 2012, excluding the onset of the Covid-19 pandemic.

European sharemarkets climbed on Monday, with energy shares up 1.7%, as oil prices were supported by hopes for a demand leading indicator, the Ifo index, staged a strong rebound, increasing to 88.6 in December, from 86.4 in November (survey: 87.5). The continent-wide FTSEurofirst 300 index rose by 0.3%. And the UK FTSE 100 index gained 0.4%, with energy and mining stocks up 2.1% and 0.6%, respectively, after authorities in Beijing said on Friday they will focus on stabilising China’s US$17 trillion economy in 2023.

US sharemarkets fell for a fourth straight session on Monday, as investors feared that the US Federal Reserve’s (‘the Fed’) monetary policy tightening campaign could push the US economy into a recession. Shares of technology giants Apple (-1.6%), Microsoft (-1.7%) and Amazon (-3.4%) were weighed down by rising US government bond yields. Walt Disney shares fell 4.8% after ticket sales of “Avatar: The Way of Water” fell short of box office forecasts. Shares of casino operator Wynn Resorts dipped 5.2% after it committed US$2.2 billion to invest and operate in Macau. Shares of defence contractor L3Harris Technologies slid 3.6% following its US$4.7 billion Aerojet Rocketdyne (+1.3%) buyout. At the close of trade, the Dow Jones index fell by 163 points or 0.5%. The S&P 500 index dropped 0.9% and the Nasdaq index shed 159 points or 1.5%.

US government bonds were weaker on Monday (yields higher) after a sell-off in European and UK government bonds dampened sentiment. Investors also weighed the Fed’s rate outlook after former New York Fed President William Dudley told Bloomberg Television that optimistic markets could only make the central bank tighten more. US 10-year Treasury yields rose by around 11 points to near 3.59%. And US 2-year Treasury yields lifted by around 8 points to near 4.26%.

Major currencies were weaker against the US dollar in European and US trade. The Euro fell from highs near US$1.0657 to lows near US$1.0576 and was near US$1.0605 at the US close. The Aussie dollar dipped from highs near US67.31 cents to lows near US66.94 cents and was near US66.95 cents at the US close. And the Japanese yen eased from near 135.76 yen per US dollar to JPY137.16 and was near JPY137.00 at the US close.

 

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Global oil prices rose by up to 1.2% on Monday. Crude investors weighed a pledge from China to revive consumption against broader risk-off sentiment in low volume trading. The Brent crude oil price lifted US76 cents or 1% to US$79.80 a barrel. And the US Nymex crude oil price added US90 cents or 1.2% to US$75.19 a barrel.

Base metal prices dipped on Monday, despite hopes for stronger demand in China on the back of proposed economic stimulus from the government. The stronger US dollar weighed on both copper (-0.1%) and aluminium (-1%).

The gold futures price fell by US$2.50 an ounce or 0.1% to US$1,797.70 an ounce. Spot gold was trading near US$1,787 an ounce at the US close. Iron ore futures slid US71 cents a tonne or 0.6% to US$109.56 a tonne.

Ahead: In Australia, the Reserve Bank (RBA) Board issues its December 6 meeting minutes and weekly consumer
confidence data is scheduled. In China, loan prime rates are announced. In the US, weekly chain store sales, housing starts and building permits figures are all released. And the Bank of Japan hands down its policy decision

Originally published by CommSec