In US economic data existing home sales rose for the third consecutive month in June, up 2.6 per cent to an annual rate of 5.04 million -- an eight-month high. The Consumer Price Index rose 0.3 per cent in June to be up 2.1 per cent over the year. Gasoline accounted for two-thirds of the gain lifting by 3.3 per cent in June. Stripping out food & energy prices, core CPI rose by a tame 0.1 per cent in June to be up 1.9 per cent on year ago.
European shares rebounded on Tuesday driven by strong earnings reports. Cooperation between Russia and Ukraine over the MH17 plane crash site also helped sentiment. The FTSEurofirst 300 index rose by 1.3 per cent, with the German Dax up by 1.3 per cent, while the UK FTSE rose 1 per cent. Australia's major miners were mixed in London trade with shares in BHP Billiton up by 2.1 per cent while Rio Tinto rose 1.4 per cent.
US sharemarkets rose on Tuesday as tame inflation data and upbeat housing figures supported sentiment. Home builders lifted with the sector up 1 per cent. Chipotle Mexican Grill jumped 12.3 per cent a day after reporting a 26 per cent jump in quarterly profit. Traders waited on Apple, which reports earnings after the bell. The Dow Jones index rose by 62 points or 0.4 per cent. The S&P 500 index gained 0.5 per cent while the Nasdaq rose by 31 points or 0.7 per cent.
US treasury prices were mixed on Tuesday with traders hopeful that tensions in the Middle East and Ukraine will ease. US 2-year yields fell by 2 points to 0.48 per cent while US 10-year yields were flat at 2.47 per cent.
Major currencies were mixed against the US dollar following European and US sessions on Tuesday. The euro fell from highs near $US1.3525 to around $US1.3465, before ending US trade near $US1.3470. The Aussie dollar rose from lows near US93.80c to highs near US94.20c before ending the US session near US93.90c. And the Japanese yen traded between JPY101.60 per US dollar and JPY101.35, ending US trade near JPY101.45.
World oil prices eased on Tuesday although trading was choppy. Fears of possible disruptions to global oil supplies from geopolitical tensions in Eastern Europe and the Middle East continued to dominate trade. European Union foreign ministers considered new sanctions against Russia -- the world’s second largest oil exporter. Brent crude fell by US31c or 0.3 per cent to $US107.37 a barrel and the US Nymex price fell by US17c a barrel or 0.2 per cent to $US104.42 a barrel.
Base metal prices rose by up to 1.5 per cent on Tuesday with the exception of tin (down 0.5 per cent). Nickel, aluminium and zinc led the way. Gold prices fell on Tuesday in response to geopolitical tensions with the Comex gold futures quote down by $US7.60 or 0.6 per cent to $US1306.30 per ounce. Iron ore fell by US60c on Tuesday or 0.6 per cent to $US95.40 a tonne.
Ahead: In Australia the Consumer Price Index is released. In the US no economic data is released.
Craig James is the chief economist at Commsec.