MORNING REPORT (7am AEST)
US home prices were unchanged in seasonally adjusted terms in July. The S&P/Case Shiller 20-city home price index was unchanged in the month but up 0.9pct in unadjusted terms to stand 4.1pct lower than a year ago. US consumer confidence rose from 45.2 to 45.4 in September. And the Richmond Fed manufacturing index improved from minus 10 in August to minus 6 in September.
The Greek parliament has approved a contentious property tax law that is crucial to its austerity plan and crucial to meeting its commitments to secure bail-out funds. European parliaments continue to vote on expansion of the European Financial Stability Fund.
European shares soared on Tuesday, posting the biggest gains since May 2010, on hopes for a resolution to the European debt crisis. Seven European countries have so far voted for an expansion of the European Financial Stability Fund with three to vote this week. The FTSEurofirst index rose by 4.6pct while the German Dax lifted by 5.3pct and the UK FTSE gained 4.0pct.
US shares posted solid gains for a second day as investors became more hopeful about progress with the European debt crisis. But shares finished well off the day´s highs after profit-takers moved in in late trade. The Dow Jones rose by almost 147pts or 1.3pct but it had been higher by 325 points with around 90 minutes left to trade. The S&P 500 was up by 1.1pct while the Nasdaq gained just over 30pts or 1.2pct.
US long-term treasuries fell again on Tuesday (yields higher) as investors took profits and switched affections from bonds to shares. US 2yr yields were steady near 0.24pct and US 10yr yields rose by 8pts to 1.985pct.
The Euro and commodity currencies continued to lift against the greenback in European and US trade on Tuesday as global financial sentiment improved. The Euro rose from lows near US$1.3480 to US$1.3665 before ending the US session near US$1.3590. The Aussie dollar also lifted from lows around US98.60c to near US99.85c, before ending US trade near US99.00c. And the Japanese yen eased from 76.30 yen per US dollar to JPY76.90 and ended US trade near the weakest levels of the session.
Global crude oil prices soared in line with other commodities and equities markets on Tuesday as investors became more positive about the European debt situation. Nymex crude oil rose by US$4.21 or 5.3pct to US$84.45 a barrel and London Brent crude rose by US$3.20 to US$107.14 a barrel.
Base metal prices soared on the London Metal Exchange on Tuesday. Lead posted the strongest gain, up 7.7pct, followed by tin, up 7.3pct. Other metals rose between 1.9-5.3pct. And the gold price rose in line with other commodities with the Comex December gold price higher by US$57.70 an ounce or 3.6pct to US$1,652.50.
Ahead: In Australia, data on new home sales is scheduled. In the US, data on durable goods orders is released.