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In US economic data, the NFIB business optimism index rose from 89.5 to 89.9 in July (survey: 88). The IBD/TIPP economic optimism index fell from 38.5 to 38.1 in August (survey: 38.6). The Redbook measure of chain store sales rose by 10.4% over the year, down from 15.5% in the prior week. Unit labour costs rose 10.8% over the year to the June quarter (survey: +9.5%) with nonfarm productivity down 4.6% (survey -4.7%).
European sharemarkets generally fell on Tuesday as investors awaited key US inflation data. Technology shares fell most, down 3.3%. Autos lost 2.2% and miners fell 0.5%. But banks rose 0.1%. Companies generally lost ground after releasing earnings results with Germany’s Continental down 6.5%. The pan-European STOXX 600 index fell by 0.7%. The German Dax index lost 1.1%. But the UK FTSE index rose by 0.1%. In London trade, shares of Rio Tinto rose by 0.6% but BHP shares fell by 0.8%.
US sharemarkets were weaker on Tuesday. Investors awaited inflation data. And higher-than-expected data on unit labor costs added to inflationary concerns. Shares in Micron Technology fell 3.7% after the memory-chipmaker cut its fourth-quarter revenue forecast. The Dow Jones index fell by 58 points or 0.2%. The S&P 500 index fell by 0.4% and the Nasdaq index fell by 150.5 points or 1.2%.
US treasuries were weaker on Tuesday (yields higher). US Treasury sold US$42 billion of 3-year notes at a yield of 3.202%. US 10-year yields rose by 2 points to near 2.78%. And US 2-year yields rose by 5 points to 3.26%.
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Major currencies were weaker against the US dollar in European and US trade. The Euro fell from highs near US$1.0245 to around US$1.0200 and was near US$1.0210 at the US close. The Aussie dollar fell from near US69.93 cents to US69.50 cents and was near US69.60 cents at the US close. And the Japanese yen eased from near 134.72 yen per US dollar to JPY135.20 and was near JPY135.10 at the US close.
Global oil prices eased by around 0.4% on Tuesday. Reuters reported that oil “prices were pressured by talks of a last-ditch effort by European nations to revive the Iran nuclear accord. On Monday, the European Union put forward a ‘final’ text to revive the 2015 Iran deal.” The Brent crude price lost US34 cents or 0.4% to US$96.31 a barrel. And the US Nymex crude price fell by US26 cents or 0.3% to US$90.50 a barrel.
Base metal prices were mixed on Tuesday. Copper, lead and nickel fell by as much as 0.6%. Other metals rose by as much as 3.1% with zinc up the most.
The gold futures price rose by US$7.10 an ounce or 0.4% to US$1,812.30 an ounce. Spot gold was trading near US$1,795 an ounce at the US close. The iron ore futures fell by US$1.67 or 1.5% to US$109.28 a tonne.
Ahead: In Australia no major economic data is scheduled. In China, data on consumer and producer prices is released. In the US, the consumer price index is issued, with the monthly budget statement, wholesale inventories and weekly mortgage finance.
Originally Published by CommSec
