MORNING REPORT
(7am AEST)
US retail sales rose by a larger than expected 0.8pct in March
after rising by 1.0pct in February. Forecasts centred on 0.3pct
growth. Excluding autos and gasoline sales rose by 0.7pct.
US business inventories rose by 0.6pct to a record $1.58
trillion as auto dealers restocked to meet increased demand for
motor vehicles. Business sales rose by a healthy 0.7pct in
February after advancing by 0.4pct in the prior month.
European shares recorded healthy gains on Monday, as the
upbeat US sales data offset concerns about Spain´s mounting debt
costs. However Spain´s 10yr government bond yields broke above
6pct for the first time since December. The benchmark
FTSEurofirst 300 index rose by 0.5pct with the German Dax up
0.6pct. The UK FTSE rose 0.3pct.
US sharemarkets were mixed on Monday. Robust retail sales data
helped large-cap consumer stocks, like Procter & Gamble (up
1.5pct) and Wal-Mart (up 1.4pct), but a fall in Apple shares hurt
the Nasdaq. Apple fell for the fifth straight session down 4.2pct
on profit taking. At the close of trade, the Dow Jones was higher
by 72pts or 0.6pct with the S&P 500 down by 0.1pct while the
Nasdaq lost 23pts or 0.8pct.
US treasuries were mixed on Monday as concerns about rising
Spanish borrowing costs increased demand for US government debt.
However this was offset by the shift to equities following the
improvement in US retails sales. US 2yr yields were flat at
0.27pct and US 10yr yields fell by 1pt to 1.98pct.
The Euro rallied in late trade against the greenback on
largely technical trading after it held key support levels ahead
of a Spanish debt auction later this week. The Euro rose from
lows around US$1.2995 to highs near US$1.3145 and ended US trade
at US$1.3140. The Aussie dollar rose from lows around US103.15c
to US103.75c and ended US trade near US103.55c. And the Japanese
yen traded between 80.81 yen per US dollar to JPY80.34 and was
near JPY80.40 in late US trade.
Benchmark crude oil prices were mixed on Monday. Worries about
Spain´s debt problems and ongoing tensions regarding Iran
dominated market activity. US Nymex crude rose by US10c or 0.1pct
to US$102.93 a barrel. London Brent crude fell by US$2.53 to
US$118.68 a barrel.
Base metal prices were mixed on the London Metals Exchange on
Monday. Copper touched a three-month low below $8,000 a tonne
before recovering ground towards the end of the session. Euro
zone jitters and downside risks to global growth dominated
sentiment. And the gold price followed most commodities lower as
investors looking for safe-haven assets turned to US bonds. June
Comex gold futures price fell by US$10.50 or 0.6pct to
US$1,649.70 an ounce.
Ahead: In Australia, RBA Board Minutes and motor vehicle sales
figures are released. In the US, housing starts, industrial
production and capacity utilisation data are released.