Howd’y USA

In US economic data, the NFIB Business Optimism index eased from 104.8 to 104.6 in December (forecast 103.6). According to the JOLTS survey, job openings eased from 7.131 million to 6.888m in November (forecast 7.063m). Chain store sales in the past week were up 8.9% on a year ago, down from the 9.3% annual growth in the prior week.

US share markets rose again on Tuesday on optimism about US- China trade talks. US President Donald Trump wrote on Twitter that “Talks with China are going very well!”. Shares in Boeing rose 3.3% after it reported that it had delivered a record 806 aircraft in 2018. With an hour of trade to go the Dow Jones was higher by 235 points or 1.0% after being up as much as 333 points in early trade. The S&P500 index was up by 0.8%. The Nasdaq index was up by 65 points or 1.0%.

US treasuries fell again on Tuesday (yields higher) with equities and commodities favoured over bonds on hopes for progress at the US-China trade talks. US Treasury sold $38 billion in three-year notes on Tuesday and will sell $24 billion in 10-year notes on Wednesday and $16 billion in 30-year bonds on Thursday. US 2- year yields rose by 6 points to 2.58% and US 10-year yields rose by 3 points to 2.71%.

Major currencies were mixed against the US dollar in US and European trade compared with the Asia close. The Euro held between US$1.1420 and US$1.1470 and was near US$1.1440 in late US trade. The Aussie dollar held between US71.15 cents and US 71.45 cents and was near US71.40 cents in late US trade. And the Japanese yen held between 104.42 yen per US dollar and JPY109.08 and was near JPY108.65 in late US trade.

Global oil prices rose by around 2.5% on Tuesday. US-China trade talks continue to encourage investors about the outlook for global growth and thus oil demand. Brent crude rose by US$1.39 or 2.4% to US$58.72 a barrel and the US Nymex price rose by US$1.26 or 2.6% to US$49.78 a barrel.

Bonjour, Europe

European share markets rose on Tuesday. Investors remain hopeful of progress in US-China trade talks. Retail stocks rose 2.1%. Shares in France's Carrefour rose 2.7% after Bank of America Merrill Lynch upgraded its rating on the stock. But shares in UK supermarket chain Morrisons fell 3.2% after sales fell short of forecasts. The pan-European STOXX600 index rose by 0.9% with the UK FTSE up by 0.7%. The German Dax index was up by 0.5% despite industrial production falling for a third month in November. In London trade, shares of Rio Tinto rose by 0.8% but shares in BHP fell by 0.3%.

Top of the morning, London

Base metal prices were mixed on the London Metal Exchange. Zinc, copper and aluminium fell by up to 1.7% while other metals rose by up to 0.8%.

The gold futures price fell by US$4.00 an ounce or 0.3% to $1,285.90 an ounce. The spot gold price was trading near US$1,285 an ounce in late US trade. Iron ore was unchanged at US$74.95 a tonne.

G’day Australia

In Australia, data on job vacancies and building approvals are released. In the US, minutes of the last Federal Reserve meeting are released with weekly mortgage applications. US President Trump addresses the nation at 1pm Sydney time. US-China trade talks continue.