Local Markets Commentary

Australian market mid-week trade will likely be pushed and pulled by supportive commodities but negative international equities leads.

In overnight commodities trade, US gold futures turned higher but settled effectively flat. Oil accelerated the pace of its latest recovery. LME copper swung higher again. Iron ore (China port, 62% Fe) jumped to approach $US60/t.

The $A fell after rising to US76.20c early yesterday evening, even though the $US also depreciated.

Locally today, a US Federal Reserve regional president is due to speak publicly in Canberra.

Overseas Market Commentary

Major European and US equities markets reacted overnight to US economic outlook and reputation commentary, central bank pronouncements and currency swings, an international cyber attack and international political argy-bargy.

A US healthcare bill vote was pushed back, bolstering concerns planned legislation to introduce tax reform, significant budget spending changes and general support for infrastructure and manufacturing may prove too difficult to become reality.

In the meantime, the International Monetary Fund (IMF) cited inequity concerns associated with the proposed US budget, plus doubts regarding tax restructuring and spending plans, in reducing its 2017 and 2018 GDP growth forecasts by 0.2% and 0.4% respectively to 2.1%.

A research firm released the results of a survey which indicated international regard for the US had dropped over the past several months.

In London, US Federal Reserve chair Janet Yellen boldly predicted financial sector reforms would likely prevent another global financial crisis over the next few decades.

Releasing a Bank of England (BoE) financial stability report, governor Mark Carney underscored the central bank’s concern should local financial institutions not increase their capital holdings by as much as ~£11B within 18 months, largely to counter consumer lending risk.

In Portugal, positive regional economic confidence talk from European Central Bank (ECB) president Mario Draghi propelled the € higher against the $US and lit a fire under select bond yields.

Mr Draghi again warned however, that the region remained in economic mode.

In US data releases, Case-Shiller estimated US house prices across 20 cities rose 5.5% during April, following a 5.8% increase in March.

The Conference Board’s June consumer confidence index rose one point for the month, to 118.9.

The Richmond Fed’s regional manufacturing index was estimated six points higher, at 7.

Tonight in the US, May pending home sales, goods trade balance and wholesale inventories are due, together with weekly mortgage applications.

The ECB-hosted central bankers’ forum concludes in Portugal, the third day featuring a panel discussion which includes the heads of the ECB, BoJ and BoE.

Monsanto and Dixons Carphone are due to report quarterly and full-year results respectively.

In overnight corporate news, a €2.4B fine imposed by a European Union (EU) regulator on Alphabet’s Google appeared a major catalyst in another tech sector sentiment slump.

The continental surprises continued, Nestlé announcing a 20B Swiss franc buy-back.