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Market Opener – 02 Aug 2018
Local Markets Commentary
The Australian market opens today’s trade on largely negative overnight international equities and commodity trade leads, ahead of influential domestic data.
In overnight commodities trade, oil extended Tuesday’s decline.
US gold futures also continued lower.
Iron ore (China port, 62% Fe) fell.
LME copper and nickel turned and dropped. Aluminium continued lower.
The $A was pushed a little lower after falling to US74.10c early yesterday evening.
Locally today, the Australian Bureau of Statistics reports June trade balance 11.30am AEST.
Overseas Market Commentary
Vacillating trade featured across most major European and US equities markets overnight, with geopolitical relations in focus in the middle of a week featuring key central bank policy meetings, plus major corporate earnings and influential data releases on both sides of the Atlantic.
The FTSE 100 dropped decisively, however, in part due to losses in the resources sector.
US officials confirmed the previous day’s reports of plans to raise the initially proposed 10% import tax on an additional $US200B worth of goods from China to 25%. China, for its part, again flagged retaliatory action. The US public comment period on the tariff plans has been extended by six days to 5 September.
In addition, the US froze the assets of two government ministers in Turkey, in response to the Turkish detention of a US citizen. Turkey’s lira subsequently traded at record lows against the $US.
Bond prices continued to fall, the US 10-year treasury yield surpassing 3.0% in early trade, in part due to the US government’s stated intent to borrow more (as in boosting bond issues) during the September quarter.
Earlier, 10-year government bonds in Japan had been pushed the most in a day in two years following the Bank of Japan’s post-policy meeting statement.
As expected overnight, the US Federal Reserve maintained rates status quo, opting again to underscore economic strength and satisfactory inflation.
In mixed US data releases, a private sector jobs report estimated 219,000 jobs were created in July, following forecasts of 185,000.
ISM’s July manufacturing index fell from 60.2 to a nonetheless robust 58.1.
June construction spending dropped 11.1%.
Weekly mortgage applications fell 2.6%.
In the euro zone, a 55.1 final July manufacturing PMI represented a 0.2 improvement on June.
Germany’s rose to 56.9 from 55.9.
Across the way, the UK’s slipped from 54.3 to 54.0.
Tonight in the US, weekly new unemployment claims and a jobs layoff are due, ahead of tomorrow night’s July employment report.
June factory orders are also due and the ISM’s New York business activity index.
Elsewhere, the Bank of England holds a keenly anticipated policy meeting. The bank will also release an inflation outlook report.
Companies due to report earnings or provide an update later today and tonight include: Activision Blizzard, Aetna, AIG, Aviva, Barclays, DBS Group, DowDuPont, Kellogg, Marubeni, Merlin Entertainments, Mitsubishi, Mitsui, Rolls-Royce, RSA Insurance, Serco, Siemens, Suzuki, Teva Pharmaceutical and Yum Brands.
Unilever trades ex-dividend on the FTSE 100.
In overnight corporate news, Apple, which reported post-Tuesday US trade, achieved record highs and settled 6% higher for the session, supporting sentiment in general across the NASDAQ.
China’s Baidu dropped 8% following reports Google planned to step up competition.
US shale oil producers suffered after revealing quarterly earnings had been adversely impacted by increased costs and hedging which bit hard when prices rose.
The Australian market opens today’s trade on largely negative overnight international equities and commodity trade leads, ahead of influential domestic data.
In overnight commodities trade, oil extended Tuesday’s decline.
US gold futures also continued lower.
Iron ore (China port, 62% Fe) fell.
LME copper and nickel turned and dropped. Aluminium continued lower.
The $A was pushed a little lower after falling to US74.10c early yesterday evening.
Locally today, the Australian Bureau of Statistics reports June trade balance 11.30am AEST.
Overseas Market Commentary
Vacillating trade featured across most major European and US equities markets overnight, with geopolitical relations in focus in the middle of a week featuring key central bank policy meetings, plus major corporate earnings and influential data releases on both sides of the Atlantic.
The FTSE 100 dropped decisively, however, in part due to losses in the resources sector.
US officials confirmed the previous day’s reports of plans to raise the initially proposed 10% import tax on an additional $US200B worth of goods from China to 25%. China, for its part, again flagged retaliatory action. The US public comment period on the tariff plans has been extended by six days to 5 September.
In addition, the US froze the assets of two government ministers in Turkey, in response to the Turkish detention of a US citizen. Turkey’s lira subsequently traded at record lows against the $US.
Bond prices continued to fall, the US 10-year treasury yield surpassing 3.0% in early trade, in part due to the US government’s stated intent to borrow more (as in boosting bond issues) during the September quarter.
Earlier, 10-year government bonds in Japan had been pushed the most in a day in two years following the Bank of Japan’s post-policy meeting statement.
As expected overnight, the US Federal Reserve maintained rates status quo, opting again to underscore economic strength and satisfactory inflation.
In mixed US data releases, a private sector jobs report estimated 219,000 jobs were created in July, following forecasts of 185,000.
ISM’s July manufacturing index fell from 60.2 to a nonetheless robust 58.1.
June construction spending dropped 11.1%.
Weekly mortgage applications fell 2.6%.
In the euro zone, a 55.1 final July manufacturing PMI represented a 0.2 improvement on June.
Germany’s rose to 56.9 from 55.9.
Across the way, the UK’s slipped from 54.3 to 54.0.
Tonight in the US, weekly new unemployment claims and a jobs layoff are due, ahead of tomorrow night’s July employment report.
June factory orders are also due and the ISM’s New York business activity index.
Elsewhere, the Bank of England holds a keenly anticipated policy meeting. The bank will also release an inflation outlook report.
Companies due to report earnings or provide an update later today and tonight include: Activision Blizzard, Aetna, AIG, Aviva, Barclays, DBS Group, DowDuPont, Kellogg, Marubeni, Merlin Entertainments, Mitsubishi, Mitsui, Rolls-Royce, RSA Insurance, Serco, Siemens, Suzuki, Teva Pharmaceutical and Yum Brands.
Unilever trades ex-dividend on the FTSE 100.
In overnight corporate news, Apple, which reported post-Tuesday US trade, achieved record highs and settled 6% higher for the session, supporting sentiment in general across the NASDAQ.
China’s Baidu dropped 8% following reports Google planned to step up competition.
US shale oil producers suffered after revealing quarterly earnings had been adversely impacted by increased costs and hedging which bit hard when prices rose.