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In US economic data, MBA mortgage applications fell by 3.7% in the past week. The goods trade deficit fell from US$90.2bn in July to US$87.3bn in August (survey: -US$89bn). Wholesale inventories lifted 1.3% in August (survey: +0.4%). Pending home sales dipped
2.0% in August (survey: -1.5%).

European sharemarkets rose on Wednesday. The continent-wide FTSEurofirst 300 index lifted by 0.3% after falling nearly 2% earlier in the session. Geopolitical tensions intensified as Europe investigated severe damage to two Nord Stream gas pipelines from Russia. The UK FTSE 100 index also gained 0.3% after falling as much as 2%. The Bank of England said it would buy as many long-dated UK government bonds as needed between now and October 14 to stabilise financial markets after the tax cut rout.

US sharemarkets rallied on Wednesday following its recent sell-off, helped by easing bond yields, after the Bank of England’s decision to stage a market intervention boosted UK stocks. Biogen shares surged 39.9% after saying its experimental Alzheimer’s drug succeeded in slowing cognitive decline. But Apple shares lost 1.3% on reports the company is dropping plans to increase production of its new iPhones this year after an anticipated surge in demand failed to materialise. Shares of Meta Platforms rose 5.4%. The Dow Jones index closed higher by 549 points or 1.9%. The S&P 500 index gained 2.0% and the Nasdaq index added 222 points or 2.1%. The Dow and S&P 500 both snapped a 6-day losing streak.

US treasuries rebounded sharply on Wednesday (yields lower) after the Bank of England said it would buy long-dated British bonds to restore financial stability. Atlanta Fed President Raphael Bostic said, “Inflation is still high … and it is not moving with enough speed back down to our 2% target.” US 10-year yields fell by around 23 points – the most since 2009 – to near 3.74% after briefly hitting a near 14-year high of 4.019%. And US 2-year yields dropped by around 18 points to near 4.13%.


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Major currencies were firmer against the US dollar in European and US trade. The Euro rose from lows near US$0.9536 to highs near US$0.9749 and was near US$0.9730 at the US close. The Aussie dollar firmed from lows near US63.63 cents to highs near US65.30 cents and was near US65.20 cents at the US close. And the Japanese yen strengthened from near 144.79 yen per US dollar to JPY143.92 and was near JPY144.10 at the US close.

Global oil prices rose on Wednesday as the US dollar eased and US fuel inventory figures showed larger-than-expected drawdowns. US crude stocks fell by 215,000 barrels in the most recent week (survey: +443,000 barrels), according to the US Energy Information Administration. The Brent crude oil price rose by US$3.05 or 3.5% to US$89.32 a barrel. And the US Nymex crude oil price added US$3.65 or 4.6% to US$82.15 a barrel.

Base metal prices were mixed on Wednesday. Copper gained 1.3% after the US dollar weakened. Lead was up 5.4% but zinc fell 0.2% with nickel down 0.1%.

The gold futures price rose by US$33.80 an ounce or 2.1% to US$1,670.00 an ounce. Spot gold was trading near US$1,660 an ounce at the US close. Iron ore futures fell by US19 cents or 0.2% to US$98.52 a tonne.

Published by CommSec