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In US economic data, the ISM services index rose from 55.3 to 56.7 in July (survey: 53.5). The S&P Global services index fell from 52.7 to 47.3 in July (survey: 47). Factory orders rose by 2% in June (survey: 1.1%). Mortgage applications rose 1.2% in the past week after falling 1.8% in the prior week.

European sharemarkets lifted on Wednesday in response to encouraging earnings updates. The positive corporate news offset data showing weaker euro zone business activity in July. The panEuropean STOXX 600 index rose by 0.5%. Shares in Societe Generale rose by 3.1% and shares in Commerzbank rose by 2.5% after reporting second quarter earnings. The German Dax index rose by 1.0% and the UK FTSE index rose by 0.5%. In London trade, shares of Rio Tinto were flat while BHP shares rose by 0.7%. * US sharemarkets rose on Wednesday. Investors were
encouraged by a gain in the ISM services index and a lift in factory orders. And there were strong profit forecasts from PayPal and CVS Health. Shares in PayPal rose by 9.3% and CVS Health rose 6.4%. Shares in Regeneron Pharmaceuticals (+5.9%) and Starbucks (+4.3%) also rose after earnings reports. And shares in Moderna
rose 16% after announcing a share buyback plan. The Dow Jones index rose by 416 points or 1.3%. The S&P 500 index rose by 1.6% and the Nasdaq index lifted by 319 points or 2.6%.

US treasuries were firmer on Wednesday (yields lower). San Francisco Federal Reserve President Mary Daly said it would be ‘reasonable’ for the Fed to lift rates 50 basis points in September rather than 75bp. US 10-year yields fell 4 points to near 2.70%. And
US 2-year yields fell by 1 point to near 3.07%.

Major currencies were mixed against the US dollar in European and US trade. The Euro fell from highs near US$1.0207 to around US$1.0120 and was near US$1.0170 at the US close. The Aussie dollar held between US69.05 cents and US69.55 cents and was near US69.50 cents at the US close. And the Japanese yen eased from near 132.90 yen per US dollar to JPY134.50 and was near JPY133.90 at the US close.

Global oil prices fell by near 4% on Wednesday. OPEC+ oil producers agreed to lift the output target by 100,000 barrels per day. And US data showed that gasoline supplies unexpectedly rose in the past week. Gasoline stocks gained 200,000 barrels, versus expectations for a 1.6 million-barrel drop – a sign of weak summer driving activity. The Brent crude price fell by US$3.76 or 3.7% to US$96.78 a barrel. And the US Nymex crude price fell by US$3.76
or 4.0% to US$90.66 a barrel.

Base metal prices eased on Wednesday by between 0.7-1.8% with copper down the most. But tin was the exception, up 0.1%.

The gold futures price fell by US$13.30 an ounce or 0.7% to US$1,776.40 an ounce. Spot gold was trading near US$1,765 an ounce at the US close. The iron ore futures fell by US$4.36 or 3.8% to US$110.38 a tonne.

Ahead: In Australia, international trade data is released. In the US, the trade balance is released with Challenger job cuts and weekly jobless claims (claims for unemployment insurance).

Published by CommSec