Markets on the mend as record high set

Share Markets: 

Modest gains were made in major share markets overnight.

The Dow rose 0.1% to reach a new record high. The S&P500 was flat but is close to its record high set in August. In Europe, the FTSE100 rose 0.3%, the Dax was up 0.2% and the Euro Stoxx 50 index rose 0.3%.

Interest Rates: 

Long bond yields continue to march higher. In the US, 10 year government bond yields rose a further 9 basis points, after the Veteran's Day holiday, to 2.24%.

Two year US bond yields rose 7 basis points to 0.99%. Long bond yields were also a touch higher in Germany, Japan and the UK overnight while in Australia yesterday they push up 9 basis points to 2.66%.

Foreign Exchange: 

The US dollar index pushed to a one year high as the euro and yen weakened. 

The AUD, having sat well into the US 77 cent range last Friday, now finds itself in the middle of the US 75 cent range, trading in a narrow band overnight.

Commodities: 

Gold slipped a touch further. Having reached a 'US election' induced spike of $US1331per ounce last week, the precious metal has fallen 8.4% to $US1219 per ounce.

The price of oil was marginally weaker but copper was a touch higher. Copper is up 20% over the past month with a major boost given by plans for infrastructure spending in the US.

The price of iron ore took a step backwards yesterday. Having reached a recent high of $US79.81 per tonne on Friday, it has slipped back a touch to $US77.77 per tonne.

Australia:

No major data released.

Europe:

European industrial production slipped 0.8% in September to be up 1.2% over the year.

European GDP figures for the September quarter will be released tonight and should provide a better feel for the overall health of the Eurozone economy.

China:

Industrial production was slightly weaker than expected, rising by 6.1% in the year to October, an unchanged annual pace from the previous month.

Retail sales growth was disappointing, hitting a five-month low.

Retail sales rose 10.0% in the year to October, down from growth of 10.7% in the year to September.

Softening growth in retail sales is concerning for China's plans to transition to consumption led economic growth, although retail sales growth still remains at a high level.

Fixed assets rose 8.3% in the January to October period, from the same period a year earlier.

This was a slight pickup from growth of 8.2% in January to September, compared to the same period in the previous year.

The growth in fixed assets has been driven by government spending, while private capital expenditure growth remains lacklustre.

Japan:

GDP was stronger than expected, rising by 0.5% in Q3.

This follows growth of 0.2% in Q2. The improvement in economic growth in Q3 was driven by strong exports, while private consumption and capital expenditure were soft.

Industrial production rose by 0.6% in September, following an increase of 1.3% in August. For the year to September, industrial production increased by 1.5%, down from growth of 4.2% in the year to August.

United States: 

No major data released.



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