* U.S. stock markets eased, as investors got to react to the corrected ISM manufacturing figures and as factory orders climbed.

* European stock markets eased back from six year highs, on the back caution ahead of the ECB meeting.

* Asian stock markets rose yesterday and are trading at seven month highs, led by a surging Japanese market.

* Commodities prices mixed, Gold prices held at $US1,244, while crude-oil held just above $US102. Copper eased to US3.137c.

The Australian sharemarket closed lower yesterday as traders digested a plethora of data, with the ASX200 closing down -0.7% at 5479. Equities traded lower after retail sales disappointed and the trade deficit narrows, while the RBA left rates on hold as expected.

Retail sales have edged 0.2% higher in April, up for a twelfth straight month, but have missed economist expectations. The current account deficit almost halved in the first quarter thanks to increased shipments of iron ore and coal, in fresh figures showing underlying strength across the economy.

In China an official survey shows the Chinese services sector grew at its fastest pace in six months in May, fuelling hopes hopes that the Chinese economy may be steadying.

The SPI 200 futures are up 0.2% at 5492, giving a modestly positive lead for the ASX market today as it hovers near six year highs. The Aussie Dollar held at US92.4c. The 5480 level is key near-term for the ASX200, as markets across Europe and the US edged lower.

It is a busy week for economic data and central bank meetings this week, with: Domestically the latest GDP are due out today, with quarterly growth forecast to be 0.9% or 3.2% annualised; Global PMI readings; Thursday the ECB meets, where easing is expected and the BoE will hold steady; Friday the key US Jobs data (monthly NFP), to name a few.

US Markets

U.S. stock markets eased after rising seven of the past eight sessions to new record highs, as investors got to react to the corrected ISM manufacturing figures and as factory orders climbed.

The three benchmark indexes all finished down around -0.1% higher. The ten S&P500 sectors finished mixed again, with gains led by the Energy and Healthcare sectors up 0.3%, Materials, Consumer Discretionary and Industrials sectors all finished down over -0.2%. The S&P500 is up 4% for the year and has rebounded 6% from its April lows.

In economic news The Commerce Department reported US factory orders rose 1.7% in April (up from the 0.5% forecast). The ISM reading was FINALLY reported to read at 55.4 (up from 54.9).

Traders remain comfortable that the economy is on the right track, given recent improving data, and will look to the NFP monthly employment report for confirmation on Friday.

For the session Dow Jones closed down -0.1% at 16,722, the S&P500 closed down -0.1% at 1,924 and the NASDAQ closed down -0.1% at 4,423, while on 10-year Treasury notes edged up again to 2.60%.

European Markets

European stock markets eased back from six year highs, on the back caution ahead of the ECB meeting.

The Stoxx Europe 600 Index fell -0.5% for the session, backing off its highest level since January 2008. Trading volumes were down -20% below the monthly average. The index has risen over 8.5% from its February lows.

In economic news the eurozone unemployment rate fell to 11.7 in April and eurozone inflation slowed in May by more than expected, while manufacturing in the eurozone grew at a slower pace 52.2 in May (down from 53.4), due to weakness in France, while it strengthened in the UK at 57 (inline with last month’s 57.3).

Equites have been supported by the recent comments from the ECB President who said that policy makers are ready to take action against low inflation. However traders are expecting the ECB to deliver at its ECB meeting on 5 June, where they have factored in confirmation of stimulus measures and perhaps lower rates.

The London market eased but is still trading near 14 year highs, after rising over 6.6% from its February lows. The German market eased back from all-time highs and is currently up over 7.2% above its April lows.

For the session the German DAX 30 closed down -0.3% at 9,919, the UK the FTSE 100 closed down -0.4% at 6,836, the French CAC 40 closed down -0.3% at 4,503, while the Spanish market close down -0.5% at 10,776.

Asian Markets

Asian stock markets rose yesterday and are trading at seven month highs, led by a surging Japanese market. The positive sentiment was supported by the more Chinese manufacturing data showing the economy is stabilising.

The MSCI Asia Pacific Index rose 0.4% for the session, reaching its highest level since last November. Across the region eight of the ten finished in the green. The index has risen over 9.4% from its February lows.

The Chinese market eased back from two week highs, after the final HSBC Chinese PMI figures came in at 49.4 (below the 49.7 expected), this reading comes after the government reported PMI rising to a five month high at 50.8. Chinese non-manufacturing PMI figures came in at 55.5 (up from the prior 54.8). The data has prompted traders to speculate the government will step in to stimulate economic growth.

In Japan the market surged to seven week highs breaking through the 15,000 level, as the yen eased. The Hong Kong market continued higher, trading above the key 23,000 level, on the back of improving company profits for industrial corporations up 10% in the four months to April, on year.

For the session the Shenzhen Composite closed down -0.3% at 2,149, the Hong Kong Hang Seng closed up 0.9% at 23,291, and the Japanese Nikkei closed up 0.7% at 15,034 while the South Korean KOSPI closed up 0.4% at 2,002.


The Dollar Index edged higher at 80.62 on a lower Euro, and the Aussie Dollar held at US92.4c. Commodities prices mixed.

Overnight the COMEX WTI Crude for JUN14 delivery closed up 0.2% at $US102.70, the COMEX Copper for JUN14 delivery closed down -1.1% at 3.137, the COMEX Gold for JUN14 delivery closed up 0.1% at $US1,244.50.

ASX News

ALL – Aristocrat Leisure the poker machine maker expects strong annual profit growth after raising its first half earnings by 9%.

MYR – Retail spending rose 0.2 per cent in April, to $23.17 billion, weaker than economists’

forecasts of a rise of 0.3 per cent.

SAI – SAI Global the IT company is reviewing its options after a $1.1 billion takeover offer sparked interest from several potential buyers.

UGL – United Group the engineering firm UGL says its confidential talks about the potential sale of its property services business DTZ continue, but have not reached a conclusion.

WRT – Westfield Retail Trust has set June 20 for the date to hold an investor vote on a controversial proposed merger with the Australasian business of Westfield Group.

Market Summary

ASX –open flat

US & UK/Europe – cautious

US ADRs – Broadly lower!…

ANZ -0.3%, NAB -0.6%, NWS 0.8%

AWC -2.6%, BHP -0.9%, RIO -0.6%, NEM 1.1%

By Michael Hevern D2MX Investment Advisor For trade ideas and recommendations on how to trade in this market, sign up for a free trial of the D2MX Daily Trading Report, call 1300 610 024 or email advisory@d2mx.com.au.

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