daily alert

housing starts fell by 4.3pct
to a 529,000 annual rate in December, the
lowest in over a year and below forecasts
centred on a result near 550,000. But
harsh winter weather was a factor behind
the weakness. And building permits soared
by 16.7pct, pointing to higher activity
ahead. Meanwhile US chain store sales
were up 2.5pct last week compared with a
year ago.

n        European shares fell from
28-month highs on Wednesday as weak US
housing data and disappointing profit
figures from Goldman Sachs drove
profit-taking. And mining stocks fell in
response to lower metal prices. In London
trade shares in Rio Tinto fell 1.7pct
while BHP Billiton dropped by 1.3pct. The
FTSEurofirst index fell by 1.3pct, with
the UK FTSE lower by 1.3pct while the
German Dax lost 0.9pct.

n        US sharemarkets were weaker on
Wednesday. Shares in Goldman Sachs fell
by 3.7pct after weak trading returns
weighed on earnings. But shares in IBM
rose 3.2pct after posting a
better-than-expected profit result. With
an hour of trade to go the Dow Jones
index was down 30pts or 0.3pct with the
S&P 500 down 1.1pct and the Nasdaq was
lower by 43pts or 1.5pct.

n        US treasuries rose on Wednesday
(yields lower) as investors drifted back
from equities to bonds in response to
disappointing economic and corporate
profit news. US 2yr yields fell 2pts to
0.57pct and US 10yr yields fell 3pts to
3.34pct.

n        The Euro and Aussie dollar
steadied against the greenback in
European and US trade after solid gains
in the Asian session. But the Japanese
yen strengthened. The Euro traded between
US$1.3435 and US$1.3535, and was holding
near US$1.3460 in late US trade. The
Aussie dollar  held between US99.90c and
US100.75c, and was near its lows in late
US trade. And the Japanese yen lifted
from 82.30 yen per US dollar to JPY81.85,
and was near JPY82.00 in late US trade.

n        US crude oil prices fell for a
second day on Wednesday. Investors
weighed up softer economic data while
supply fears continued to ease as the
operator of Alaska’s main oil pipeline
prepared to lift shipments to normal
levels after the recent shutdown. The
Nymex crude oil contract fell by US52c to
US$90.86 a barrel. But the Brent crude
contract rose by US39c to US$98.19 a
barrel.

n        Base metal prices fell on the
London Metal Exchange on Wednesday in
response to weak US housing data. Metals
fell between 0.9-3.6pct with aluminium
faring best and lead down the most after
LME stock levels hit 15-year highs.
Copper lost 1.4pct after earlier hitting
record highs. But the gold price rose
modestly on safe-haven flows. The Comex
gold futures price was higher by US$2.00
an ounce to US$1,370.20.

n        Ahead:  In Australia, detailed
labour data is released. BHP Billiton
releases quarterly production figures.
In China monthly economic data and
economic growth figures are released. In
the US, the leading index, Philadelphia
Fed index and weekly jobless claims data
are due.

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