In US economic data, consumer credit rose by $US19.6 billion in May -- in line with expectations. US Minneapolis Fed President Kocherlakota (voter, dove) spoke overnight, saying that the improvement in the unemployment rate overstates the degree of healing in the labour market. In addition he stated that it was more likely inflation would come in below the Fed's 2 per cent target over the next year than above it.
European shares fell on Tuesday on weaker-than-expected German export data. German banks became the latest lenders to negotiate a costly settlement with US authorities for dealing with blacklisted companies. Media reports claimed that Commerzbank's (down 5.6 per cent) settlement was expected to include at least $500 million in penalties. Eurozone banks fell 2.8 per cent. The FTSEurofirst 300 index fell by 1.3 per cent, the German Dax lost 1.4 per cent while the UK FTSE fell by 1.3 per cent. Australia's major miners finished lower in London trade with shares in BHP Billiton down by 1.0 per cent while Rio Tinto lost 0.1 per cent.
US sharemarkets fell on Tuesday in a broad-based sell-off as investors showed caution ahead of the start of earnings season. According to Thompson Reuters profits for the S&P 500 are expected to grow 6.2 per cent in the second quarter down from the 8.4 per cent forecast at the start of April. Alcoa is set to report results after the close of US trade. Nine of the 10 S&P 500 sectors were lower, with only the defensive utilities sector higher. The Dow Jones fell by 118 points or 0.7 per cent with the S&P 500 index down by 0.7 per cent and the Nasdaq lost 60 points or 1.4 per cent.
US treasury prices rose on Tuesday (yields lower) with weaker German data stoking demand for safe-haven bonds. Traders were also waiting on the $27 billion auction of 3-year notes. US 2-year yields fell by 2 points to 0.51 per cent while US 10-year yields fell by 5 points to 2.56 per cent.
Major currencies rose against the US dollar on Tuesday. The euro rose from lows near $US1.3585 to highs near $US1.3615, closing US trade near $US1.3610. The Aussie dollar rose from lows near US93.80c to highs near US94.15c and ended US trade near US94.05c. And the Japanese yen lifted from 101.85 yen per US dollar to JPY101.50, ending US trade near JPY101.55.
World oil prices fell on Tuesday with all manner of fears about supply disruptions failing to be realised into actual reductions in production or exports from key Middle East producers. Brent crude fell for the seventh straight session, down by $US1.25 or 1.1 per cent to $US108.99 a barrel and the US Nymex price closed lower by US23c or 0.2 per cent to $US103.40 a barrel.
Base metal prices were mostly higher on the London Metal Exchange on Tuesday with the exception of tin (down 0.8 per cent). Nickel lifted most, up 2.3 per cent, and lead, aluminium and zinc all gained 1.1 per cent. The Comex gold futures quote fell by US50 to $US1,316.50 per ounce. Iron ore rose by US60c a tonne or 0.6 per cent to $US96.50 a tonne.
Ahead: In Australia, consumer confidence data is released. In China, data on producer and consumer prices is released. In the US, the weekly mortgage market index is released together with minutes of the June 17/18 Federal Reserve meeting.