Scoreboard: Mixed bag

Wall Street recovered from a weak start as investors digested the latest IMF growth forecasts and Chinese data, while oil prices slid further and gold hit a five-month high.

In US economic data, the National Association of Home Builders index was steady at 57 in January, short of expectations for a rise to 58.

The International Monetary Fund expects the global economy to grow by 3.5 per cent in 2015, up from 3.3 per cent growth in both 2013 and 2014. The IMF revised up forecasts for US growth.

European shares rose on Tuesday in response to favourable Chinese economic data. Traders are keenly awaiting the European Central Bank meeting on Thursday with fresh stimulus measures expected. The FTSEurofirst 300 index rose by 0.9 per cent to seven-year highs with the German Dax up by 0.1 per cent to record highs and the UK FTSE lifted by 0.5 per cent. In London, trade mining shares rose with BHP Billiton up by 1.8 per cent while Rio Tinto gained 1.0 per cent.

US sharemarkets recovered from lows on Tuesday. Investors digested the latest IMF forecasts and Chinese economic data and awaited the European Central Bank meeting and tonight's State of the Union address by the President. At the close, the Dow Jones was up by almost 4 points or less than 0.1 per cent after being down 165 points at one stage. The S&P 500 index was up by 0.2 per cent and the Nasdaq was up by 20.5 points or 0.4 per cent.

US treasuries rose on Tuesday (yields fell) on expectations that the European Central Bank will unveil a bond-buying program on Thursday. There is demand for higher-yielding US bonds in preference to European securities. US two-year yields were flat near 0.49 per cent while US 10-year yields fell by 3 points to 1.81 per cent.

Major currencies were mixed against the greenback in European and US trade on Tuesday. The euro fell from highs near $US1.1615 to lows near $US1.1540 and was around the lows in afternoon US trade. The Aussie dollar rose from lows near US81.65c to highs around US82.15c but eased to US81.70c in afternoon US trade. And the Japanese yen eased from 118.00 yen per US dollar to ¥118.86 and was near ¥118.80 in afternoon US trade.

World oil prices fell on Tuesday. The IMF cut economic growth forecasts and the European Central Bank is poised to announce new measures to boost growth. And Iran's oil minister was quoted as saying: "Even if the oil price goes down to $25 a barrel, the oil industry will not be threatened." Brent fell by US85c or 1.7 per cent to $US47.99 a barrel while the US Nymex crude price fell by $US2.30 or 4.7 per cent to $US46.39 a barrel.

Base metal prices were higher by up to 2.7 per cent on the London Metal Exchange on Tuesday with lead the strongest while copper edged only 0.2 per cent higher. Gold rose to a five-month high on Tuesday, with the Comex gold futures price up by $US17.30 an ounce or 1.4 per cent to $US1,294.20 per ounce. Iron ore fell by US40c to $US67.40 a tonne on Tuesday.

Ahead: In Australia, the Westpac-Melbourne Institute consumer sentiment survey is released. The CBA business sales index is released. In the US, housing starts, weekly housing loan data and weekly chain store sales data are released.

Craig James is chief economist with CommSec.

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