Scoreboard: US jitters

Strong quarterly economic growth data failed to inspire Wall Street, while European markets gained some ground.

In US economic data the consumer confidence index fell from 94.1 to 88.7 in November, well short of forecasts centred on a reading near 96.0. The Case Shiller home price index rose by 0.3 per cent in September to be up 4.9 per cent over the year. The US economy grew at a 3.9 per cent annual pace in the September quarter, up from the 3.3 per cent consensus forecast.

US regional surveys were mixed: the Richmond Federal Reserve index eased from 20 to 4 in November but the Dallas Fed services index rose from 14.0 to 25.4.

European shares rose on Tuesday but gains in bank stocks were offset by weakness in resources. The FTSEurofirst 300 index rose by 0.2 per cent, the German Dax lifted by 0.8 per cent while the UK FTSE edged 1.4 points higher or less than 0.1 per cent. In London trade shares in BHP Billiton fell by 1.7 per cent while Rio Tinto gained 0.3 per cent.

US sharemarkets generally traded in tight ranges again on Tuesday. At the close of trade, the Dow Jones was down by 3 points or less than 0.1 per cent after trading in a 64 point range. The S&P 500 index was down by 0.1 per cent and the Nasdaq gained 3.4 points or 0.1 per cent.

US long-term treasuries rose on Tuesday (yields lower), assisted by strong demand for 5-year notes. US Treasury sold $35 billion in five-year notes and $13 billion in two-year floating rate notes. And strong GDP data was balance by weaker consumer confidence figures. Treasury will sell $29 billion in seven-year notes on Wednesday. US 2 year yields rose by 2 points to 0.524 per cent while US 10 year yields fell by 5 points to 2.266 per cent.

Major currencies were again mixed against the greenback in the European and US sessions on Monday. The euro lifted from lows near $US1.2400 to highs near $US1.2485, and was around $US1.2470 in late US trade. The Australian dollar fell from highs near US86.05c to around US85.15c, and was near US85.20c in late US trade. And the Japanese yen held between 117.70 yen per US dollar and ¥118.27 and was near ¥117.90 in late US trade.

World oil prices eased on Tuesday as traders anticipated little change in production quotas from Thursday's meeting of OPEC oil nations. Brent crude fell by $US1.35 or 1.7 per cent to $US78.33 a barrel while the US Nymex crude price fell by $US1.69 or 2.2 per cent to $US74.09 a barrel.

Base metal prices were lower by up to 1.1 per cent on the London Metal Exchange on Tuesday with copper and tin leading the declines. But aluminium edged up 0.5 per cent. Gold rose slightly with Comex gold futures down by $US1.40 an ounce or 0.1 per cent to $US1,197.10 per ounce. Iron ore fell by $US1.40 to $US68.60 a tonne on Tuesday.

Ahead: In Australia, construction work done data is released while BREE releases data on resources and energy projects. In the US, durable goods orders, jobless claims, personal income, pending home sales, consumer sentiment and the Chicago purchasing managers index are all released.

Craig James is chief economist at CommSec

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