In US economic data, the Dallas Fed manufacturing activity index rose from -19.4 to -14.4 in November (survey: -21).
European sharemarkets fell on Monday on economic jitters as China posted record-high Covid-19 infections. China-sensitive construction and materials stocks fell by the most, down 1.5%, with energy shares 1.4% lower. European Central Bank (ECB) President Christine Lagarde said that euro zone inflation has not peaked, hinting at further interest rate hikes ahead. The continent-wide FTSEurofirst 300 index fell by 0.6% and the UK FTSE 100 dipped by 0.2%.

US sharemarkets tumbled on Monday on concerns that China may tighten its Covid-19 restrictions further, undermining prospects for global growth. The S&P 500 energy index slid 2.7%. Apple shares fell by 2.6% on reports that the company would see a production shortfall due to unrest at the world’s biggest iPhone factory in China. Shares of Biogen slid 4.3% following a reported death in its experimental Alzheimer’s drug trial. But Amazon shares rose by 0.6% on industry reports that spending on Cyber Monday might hit a record US$11.6 billion. At the close of trade, the Dow Jones index fell by 498 points or 1.5%. The S&P 500 index also lost 1.5% and the Nasdaq index slid by 177 points or 1.6%.

US government bonds rose on Monday (yields lower). Federal Reserve Bank of St. Louis President James Bullard said markets may be underestimating the chances of higher interest rates. And his New York counterpart John Williams noted that policymakers have more work to do to curb inflation. Federal Reserve Vice Chair Lael Brainard said supply shocks are keeping inflation elevated. US 10-year Treasury yields fell by around 2 points to near 3.69%. And US 2-year Treasury yields dipped by around 3 points to near 4.45%.

Major currencies were weaker against the US dollar in European and US trade. The Euro fell from highs near US$1.0495 to lows near US$1.0329 and was near US$1.0340 at the US close. The Aussie dollar dipped from highs near US67.23 cents to lows near US66.42 cents and was near US66.50 cents at the US close. And the Japanese yen eased from near 137.51 yen per US dollar to near JPY138.99 and was around JPY138.90 at the US close. Global oil prices were mixed on Monday. Prices recovered after falling to close to the lowest this year, as rumours of an OPEC+
production cut offset demand concerns in China, the world’s biggest crude importer. The Brent crude oil price fell by US44 cents or 0.5% to US$83.19 a barrel. But the US Nymex crude oil price rose by US96 cents or 1.3% to US$77.24 a barrel.

Base metal prices fell on Monday as China’s Covid-19 outbreak worsened and street protests in cities across the nation threatened to derail economic activity and sap demand for raw materials. Copper fell by 0.5% with aluminium down 0.2%. The gold futures price fell by US$13.70 an ounce or 0.8% to US$1,740.30 an ounce. Spot gold was trading near US$1,741 an ounce at the US close. Iron ore futures lifted US30 cents a tonne or 0.3% to US$93.04 a tonne.


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Originally published by CommSec