Morning Market Analysis: Soft Night Overseas


Morning Market Analysis: Soft Night Overseas

Morning Market Analysis: Soft Night Overseas

International markets pulled back overnight amid soft economic data out of China, Europe and the US.

In Europe the FTSE shed 11 points (-0.2%) to settle at 5917, whilst the CAC (-0.5%) and DAX (-0.9%) were even weaker.

A weaker purchasing managers index reading was one of the major catalysts for the softness in Europe, causing investors to book further profits on recent gains.

The eurozone flash composite purchasing managers index reading for February dipped to 49.7 from 50.4. The service sector PMI dipped to 49.4 from 50.4, the manufacturing measure eased to 48.8 from 49.0.

Stateside, the Dow Jones lost 27 points (-0.2%) to settle at 12939, whilst the S&P (-0.3%) and Nasdaq (-0.5%) also lost ground.

US existing home sales rose by 4.3% in January to a 20-month high of 4.57 million, slightly below market expectations. The supply of homes fell to a seven year low.

US chain store sales in the past week were 2.9% higher than a year ago according to the Johnson Redbook index.

The Aussie dollar was steady overnight, holding around US$1.065 whilst the he yen weakened to a seven-month low against the US dollar as the highest yield premium on Treasuries when compared with Japanese debt since August damped the appeal of yen-denominated assets.

Oil recovered from early session weakness to close three cents higher at US$106.28 a barrel.

Base metal prices were mixed; tin, nickel and copper recorded small declines and other metals rose between 1.2-2.0%.  Gold gained 1.1% to US$1,782 an ounce.

In company news, David Jones has announced a 3.1% year-on-year fall in 2Q12 sales, citing a tough retail environment.

Today average weekly earnings data is released.

A raft of companies report earnings including IAG, Virgin Australia, Fairfax Media and Toll Holdings.

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