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MORNING REPORT (7.00am AEST)
The S&P/Case Shiller composite index of 20 metropolitan areas declined 0.2pct in February - ahead of expectations for a 0.3pct decline. Prices in the 20 cities have fallen 3.3pct over the year and the index is holding just shy of its 2009 low.
US consumer confidence rose from 63.8 to 65.4 in April. The expectations index and the present situation index both recorded healthy gains. Consumer expectations for inflation over the coming year fell from 6.7pct to 6.3pct. The Richmond Fed index rose from 14 to 28 in April.
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European shares gained for the fourth straight session, closing at a two-week high on Tuesday. Strong earnings boosted investor sentiment. Swiss banks recorded healthy gains after UBS (up 3.9pct) reported a better than expected earnings result, driven by its wealth management division. The FTSEurofirst index rose 0.3pct. The German Dax gained 0.8pct and the UK FTSE rose 0.9pct.
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US sharemarkets rallied on Tuesday to their best levels since June 2008. The rally was driven by upbeat earning from an array of companies. According to Thomson Reuters 35pct of the S&P 500 companies have reported earnings, with 76pct exceeding analyst expectations. The S&P 500 broke through a key resistance level at 1,344. The Dow Jones index rose 115pts or 0.9pct with the S&P 500 higher by 0.9pct while the Nasdaq gained 22pts or 0.8pct.
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US treasuries rallied on Tuesday (yields lower) on expectations that the Federal Reserve will maintain its commitment to keep interest rates near zero. US 2yr yields fell by 4pts to 0.607pct and US 10yr yields fell by 6pts to 3.309pct.
The US dollar slumped against major currencies, with the Euro rising to a 16-month high. The Fed started its two-day policy meeting on Tuesday and traders bet that the US will lag other central banks in raising interest rates. The Euro rallied from lows near US$1.4515 to US$1.4645, ending US trade near US$1.4640. The Aussie dollar rose from lows near US106.80c to US107.90c, ending US trade near US107.75c. And the Japanese yen traded between 81.90 yen per US dollar to near JPY81.45, before closing US trade at JPY81.55.
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US crude oil prices eased marginally on Tuesday as investors waited on the statement from the two-day Federal Reserve meeting. The Nymex crude oil contract fell by US7c or 0.1pct to US$112.21 a barrel. The London Brent crude rose by US48c to US$124.14 a barrel.
Base metal prices were mostly weaker on the London Metal Exchange on Tuesday. The heavy falls in Asian markets yesterday saw investors trim commodity positions. And the Comex gold futures price eased by US$5.60 an ounce to US$1,503.50.
Ahead: In Australia, consumer price data is released. In the US, the FOMC rate decision and durable goods orders are released.
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