Scoreboard: American volatility

US stocks sold off heavily late in the session, while European markets edged up and China narrowed its trade surplus.

In Chinese economic data released yesterday, the trade surplus narrowed from US$49.83 billion to $US31.0bn in September, with exports up 15.3 per cent on a year ago with imports up 7 per cent.

European shares rose on Monday. Airlines rose in response to the continued fall of crude oil prices and German lender Commerzbank rose 2 per cent on reports that the European Central Bank told the bank it had a favourable outcome to stress test results. The FTSEurofirst 300 index rose by 0.1 per cent while the UK FTSE gained 0.4 per cent and the German Dax lifted by 0.3 per cent. And Australia's major miners were stronger in London trade in line with a higher iron ore price with shares in BHP Billiton up by 2.9  per cent while Rio Tinto gained 4.2 per cent.

US sharemarkets largely tracked sideways in the morning session before selling off in afternoon trade. Trading volumes were thin, with some offices observing the Columbus Day holiday. Investors also remained wary ahead of key earnings results this week. The Dow Jones lost 180 points in the last 45 minutes of trade and ended lower by 223 points or 1.4 per cent, with the S&P 500 index down by 1.7 per cent while the Nasdaq lost almost 63 points or 1.5 per cent.

The US government bond market was closed for the Columbus Day holiday on Monday. Last week US 2-year yields were down 11 points to 0.428 per cent while US 10 year yields were down 14 points to 2.29 per cent.

Major currencies lifted against the greenback over the afternoon US session on Monday. The Euro held between $US1.265 and $US1.27, ending US trade near US$1.27. The Aussie dollar rose from lows near US87.10c to highs around US87.75c, ending the US session near US87.60c. And the Japanese yen held between 107.07 yen per US dollar to JPY107.55, ending US trade near JPY107.08.

World oil prices eased again on Monday on fears that OPEC oil producers won't take action to curtail production in the face of plentiful global supplies. OPEC next meets on November 27. According to Reuters, Saudi Arabia has privately told oil market participants it can accept oil prices between $80 and $90 a barrel. Brent crude fell by US$1.32 or 1.5 per cent to US$88.89 a barrel while the US Nymex crude price fell by 8c to $US85.74 a barrel.

Base metal prices rose by up to 1.2 per cent on Monday with copper leading the gains. But tin bucked the trend, down by 0.2 per cent. Gold rose, with the Comex gold futures quote up by US$8.30 an ounce or 0.7 per cent to US$1,230 per ounce.  Iron ore was up by $US3.20 or 3.9 per cent to US$83.10 a tonne.

Ahead: In Australia, the NAB business survey is released with the Roy Morgan-ANZ weekly consumer sentiment data. In the US, Citigroup, JP Morgan Chase and Intel report quarterly earnings.

Craig James is chief economist at CommSec. 

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