In US economic data consumer confidence fell from 126.6 to an 18-month low of 120.2 in January (forecast 124.9). The S&P/Case Shiller home price index fell 0.1% in November with the annual rate down from 5% to 4.7% (forecast 4.9%). Chain store sales in the past week were up 5.8% on a year ago, down from a 7% annual gain in the prior week.

US share markets were mixed yesterday. Earnings results were generally positive but there was also a raft of profit downgrades including those by 3M, Allergan and Harley Davidson. Investors also await key earnings from tech companies such as Apple, Amazon and Microsoft. And the Federal Reserve rates decision occurs on Wednesday. With an hour of trade to go, the Dow Jones index was up by 23 points or 0.1%. The S&P500 index was down by 0.3%. And the Nasdaq index lost 61 points or 0.9%.

US treasuries were firmer (yields lower) yesterday. There was strong demand for new debt issues on Monday and this demand continued for the $32 billion auction of seven-year notes yesterday. Consumer confidence data was weaker-than-expected. The Federal Reserve hands down its rate decision on Wednesday and US-China trade talks commence. US 2-year yields fell by 2 points to 2.57% and US 10-year yields fell by 3 points to 2.715%.

Major currencies generally eased against the US dollar in US and European trade compared with the Asia close. The Euro eased from highs near US$1.1445 to US$1.1410 and was near US$1.1425 in late US trade. The Aussie dollar fell from US71.75 cents to US71.45 cents and was near US71.55 cents in late US trade. And the Japanese yen eased from 109.19 yen per US dollar to JPY109.53 and was near JPY109.35 in late US trade.

Global oil prices rebounded by around 2.5% yesterday after falling 3.0% on Monday. The US imposed sanctions on Venezuelan state-owned oil company, PDVSA, easing concerns about global oversupply of crude. Meanwhile, Reuters report that Libya's biggest oilfield, El Sharara, will remain shut until departure of an armed group occupying the site. Brent crude rose by US$1.39 or 2.3% to US$61.32 a barrel and the US Nymex price rose by US$1.32 or 2.5% to US$53.31 a barrel. 

Bonjour, Europe

European share markets were firmer yesterday. There was caution ahead of key events such as the US interest rate decision and US-China trade talks. Technology shares fell 0.5% ahead of key US earnings results. The pan-European STOXX600 index rose by 0.8%. The UK FTSE lifted by 1.3% while the German Dax index edged up 0.1%. In London trade, shares of Rio Tinto rose by 3.4% and BHP rose by 0.7%.

Top of the morning, London

Base metal prices mostly rose on the London Metal Exchange. Nickel rose 2.5% and aluminium rose by 1.5% but zinc lost 1% while lead eased 0.2%. The gold futures price rose by US$5.80 an ounce or 0.4% to $1,308.90 an ounce. The spot gold price was near US$1,310 an ounce in late US trade. Iron ore rose by US$3.30 or 4.4% to US$78.70 a tonne. 

G’day, Australia

The Consumer Price Index is released with weekly consumer sentiment. In the US, the Federal Reserve hands down its interest rate decision. The ADP employment report is issued with pending home sales. US-China trade talks are held.