In US economic data, the National Association of Home Builders index (NAHB) fell from 49 to a 16-month low of 46 in September (survey: 47).

European sharemarkets were mixed on Monday. The panEuropean STOXX 600 index lost 0.1% despite being down 1% for most of the session. Shares in Volkswagen rose by 1.1% as it saw a valuation of up to 75 billion euros (US$75.1 billion) for luxury sportscar maker Porsche, in what will be Germany’s second-largest initial public offering in history. Shares in Porsche Holding, Volkswagen’s top shareholder, added 3.5%. The German Dax index rose by 0.5% but the French sharemarket fell by 0.3%. The UK market was closed for a public holiday.

US sharemarkets were volatile on Monday as investors await the Federal Reserve interest rate decision. A 75 basis point increase in the federal funds rate is fully priced in. Industrial stocks and banks led gains. Shares in vaccine maker Moderna fell by 7.1% after US President Biden declared “the pandemic is over”. At the close of trade, the Dow Jones index was higher by 197 points or 0.6%. The S&P 500 index rose by 0.7% and the Nasdaq index lifted by 87 points or 0.8%.

US treasuries fell on Monday (yields higher). Investors are awaiting the interest rate decision by the Federal Reserve while a number of other central banks are expected to lift policy rates over the week. US 10-year yields rose by 5 points to near 11-year highs around 3.49%. And US 2-year yields rose by 9 points to near 15-year highs around 3.95%.

Major currencies eased against the US dollar in European and US trade. The Euro rose from near US$0.9967 to highs near US$1.0027 and was near session highs at the US close. The Aussie dollar rose from lows near US66.70 cents to highs near US67.28 cents and was near highs at the US close. And the Japanese yen rose from 143.62 yen per US dollar to JPY143.16 and was near JPY143.20 at the US close.

 

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Global oil prices rose by 0.7% on Monday. According to Reuters, output by OPEC+ oil producers fell short of its quotas by 3.583 million barrels per day in August. Other factors affecting pricing at present include global recession fears, the European gas supply crisis, fluctuations in the US dollar and Covid restrictions in China. The Brent
crude oil price rose by US65 cents or 0.7% to US$92.00 a barrel. And the US Nymex crude oil price rose by US62 cents or 0.7% to US$85.73 a barrel.

The London Metal Exchange was closed for a public holiday on Monday so there are no updated base metal prices.

The gold futures price fell by US$5.30 an ounce or 0.3% to US$1,678.20 an ounce. Spot gold was trading near US$1,673 an ounce at the US close. Iron ore futures fell by US43 cents or 0.4% to US$98.63 a tonne.

Ahead: In Australia, the minutes of the last Reserve Bank board meeting is issued. The ANZ/Roy Morgan consumer confidence survey is issued. In China, the decision on loan prime rates is made. In the US, data on housing starts and existing home sales is issued with weekly chain store sales. The US Federal Reserve Open Market Committee begins a 2-day meeting

Originally published by CommSec