daily finance report

n US existing home sales soared by
12.3% to annual rate of 5.28 million far
surpassing forecasts for a rise to 4.85
million. US jobless claims fell by 37k
to 404k over the past week. The
Philadelphia Fed Index eased from 20.8 to
19.3 in January. Underlying
sub-components of the index like new
orders and shipments remained healthy.
The Conference Board’s leading index rose
by 1.0% in Dec.

n European shares fell for the
second straight session. Mining stocks
were among the causalities as investors
worried that China will have to undertake
further tightening to combat inflation.
BHP Billiton lost 3.6pct and Rio Tinto
gave back 3.2pct. The FTSEurofirst index
fell by 1.1pct, with the UK FTSE lower by
1.8pct while the German Dax lost 0.8pct.

n US sharemarkets were modestly
weaker on Thursday as investors booked
profits after the recent round of gains.
Sectors that have led the recent rally
were the hardest hit with the S&P
materials index losing 1.7pct and the
Philadelphia semiconductor index losing
1.5pct. Shares in Freeport McMoran Copper
and Gold lost almost 4pct after it cut
its sales forecast and said costs would
rise. With an hour of trade, the Dow
Jones index was down almost 7pts or
0.1pct with the S&P 500 down 0.1pct and
the Nasdaq was lower by 17pts or 0.6pct.

n US treasuries fell on Thursday
(yields higher) following a weak bond
auction. The $13 billion sale of 10yr
TIPS was met with lacklustre demand. US
2yr yields rose 5pts to 0.63pct and US
10yr yields rose 10pts to 3.45pct.

n The US dollar rallied against
major currencies in overnight trade
following the better than expected US
economic data. The Euro hit early highs
near US$1.3515 before falling to lows
near US$1.3400 and was holding near US
$1.3465 in late US trade. The Aussie
dollar fell from highs around US99.65c to
US98.35c, and was near US98.75c in late
US trade. The Japanese yen fell from
82.05 yen per US dollar to JPY83.05, and
was near JPY83.00 in late US trade.

n US crude oil prices fell for a
third straight session on Thursday
following the unexpected rise in weekly
oil inventories. EIA data showed that US
crude stockpiles rose by 2.62 million
barrels against expectations for a
400,000 barrel drawdown. The rise in
inventory was the first in seven weeks.
The Nymex crude oil contract fell by U
$2.00 to US$88.56 a barrel. And London
Brent crude contract fell by US$1.40 to
US$96.76 a barrel.

n Base metal prices fell on the
London Metal Exchange on Thursday in
response to concerns that China may look
at further monetary policy tightening.
The rise in the US dollar also dampened
investor demand for commodities. Most
metals fell between 1.0-3.2pct, however
Nickel bucked the trend up by 0.4pct. And
the gold price followed the oil price.
The Comex gold futures price was lower by
US$23.70 an ounce to US$1,346.50.

n Ahead: In Australia, import and
export data is released. In the US, no
economic data is released.

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