Scoreboard: Fed followers

In US economic data, the Standard & Poor's/Case Shiller home price index eased 0.3 per cent in May to be up 9.3 per cent over the year. Economists tipped a 0.2 per cent rise in prices in the month to be up 10 per cent over the year. The consumer confidence index rose from 85.2 to 90.9 In July, well above forecasts for a result near 85.3. The Dallas Federal Reserve services index rose from 16.9 to 21.5 in July. And chain store sales in the latest week were up by 3 per cent on a year ago, down from 3.7 per cent in the previous week.

European shares rose on Tuesday in response to better-than-expected earnings from major companies. The FTSEurofirst 300 index rose by 0.3 per cent with the German Dax up by 0.6 per cent while the UK FTSE rose by 0.3 per cent. Australia's major miners were higher in London trade with shares in BHP Billiton up by 1.0 per cent while Rio Tinto rose by 1.5 per cent.

US sharemarket indexes eased on Tuesday as investors awaited the Federal Reserve decision and latest economic growth figures. Shares in United Parcel Service fell by 3.7 per cent after the courier giant cut its earnings guidance. The fall in UPS shares weighed on transport stocks. The Dow Jones index fell by 70 points or 0.4 per cent with the S&P 500 index lower by 0.5 per cent while the Nasdaq lost just 2.2 points or 0.1 per cent.

US treasury prices were mixed on Tuesday as traders positioned ahead of the Federal Reserve decision and key economic data. US 2-year yields rose by 4 points to 0.547 per cent while US 10-year yields were down by 3 points to 2.46 per cent.

Major currencies were softer against the US dollar on Tuesday ahead of the Federal Reserve decision. The euro fell from highs near $US1.3445 to $US1.3405, before ending US trade near $US1.3410. The Aussie dollar fell from highs near US94.05c to lows near US93.75c before ending the US session near US93.80c. And the Japanese yen eased from 101.85 yen per US dollar to JPY102.15, ending US trade near JPY102.10.

World oil prices were mixed on Tuesday. Brent crude rose by US15c or 0.1 per cent to $US107.72 a barrel as investors became more confident that European sanctions against Russia won't dent oil demand. But the US Nymex price fell by US70 cents a barrel to $US100.97 a barrel after a refinery fire in Kansas reduced demand for West Texas crude.

Base metal prices fell by up to 1.9 per cent on Tuesday with zinc posting the biggest decline. But tin bucked the trend, up by 1.1 per cent. Gold prices eased on Tuesday in response to a mildly firmer greenback with the Comex gold futures price down by $US5.00 an ounce to $US1,298.30 per ounce. Iron ore rose by $US1.00 a tonne to $US94.30 a tonne.

Ahead: In Australia, no major economic data is expected. Woolworths is scheduled to release quarterly sales figures. In the US, the Federal Reserve hands down its monetary policy decision. Data on economic growth (GDP) is released together with the ADP employment report.

Craig James is the chief economist at Commsec.