European shares recovered in late trade on Tuesday, after hitting an eight-month low earlier in the session. The better earnings results out of the US and rally in US equities prompted the turnaround. Earlier concerns about euro zone growth weighed on markets. The German ZEW monthly survey of economic sentiment fell for a 10th straight month to minus 3.6, the weakest result in almost two years. 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 0.2 per cent. And Australia's major miners were stronger in London trade in line with shares in BHP Billiton up by 1.6 per cent while Rio Tinto gained 2.4 per cent.
US sharemarkets gave back gains in late trade on Tuesday weighed down by the weakness in energy stocks. Earlier in the session strong earnings results supported buying. Citigroup rose by 3 per cent after posting better-than-expected quarterly results and saying it would pull out of consumer banking in 11 markets. The S&P Financial index gained 0.5 per cent. The S&P industrial sector led the gains, up 1.3 per cent. The S&P energy sector lost 1.2 per cent. The Dow Jones closed 6 points lower with the S&P 500 index up by 0.2 per cent while the Nasdaq rose almost 14 points or 0.3 per cent.
US treasury prices rose on Tuesday (yields lower) driven by concerns about slowing global growth. US 2 year yields fell by 6 point to 0.372 per cent while US 10 year yields were down 8 points to 2.197 per cent.
Major currencies fell against the greenback over the European and US session on Tuesday. The euro fell from highs near $US1.27 to lows near $US1.26, ending US trade near $US1.2655. The Aussie dollar fell from highs near US87.95c to lows around US86.95c, ending the US session near US87.05c. And the Japanese yen held between ¥107.30 per US dollar to ¥106.30, ending US trade near ¥107.05.
World oil prices fell sharply on Tuesday after the International Energy Agency cut global oil demand for 2014 and 2015. The IEA cut demand for OPEC oil by 200,000 barrels per day in both years. OPEC producer Iran and Kuwait said there was no need to rein in supplies, adding to the bearish tone for oil. In addition the US Energy Information Administration projected that shale oil output would increase by over 100,000 barrels per day in November. Brent crude fell by $US3.85 or 4.3 per cent to US$85.04 a barrel while the US Nymex crude price fell by $US3.90 or 4.5 per cent to US$81.84 a barrel -- the biggest percentage fall in two years.
Base metal prices were mixed on Tuesday with copper (up 1.1 per cent) once again leading the gains. Tin led the declines, down by 2.5 per cent. Gold rose, with the Comex gold futures quote up by $US4.30 an ounce or 0.3 per cent to $US1,234.30 per ounce. Iron ore was unchanged at $US83.10 a tonne.
Ahead: In Australia, consumer confidence, dwelling commencements for the June quarter and new vehicle sales figures are released. China releases inflation data. US retail sales business inventories and the Federal Reserve Beige book are all slated for release.
Craig James is chief economist at CommSec.