Local Markets Commentary

The Australian market opens mid-week trade on lacklustre US equities and mixed commodities leads, ahead of a US Federal Reserve policy statement tonight (early tomorrow AEST).

In overnight commodities trade, oil dropped further. US gold futures turned to settle slightly higher. LME copper rallied. Iron ore (China port, 62% Fe) was pushed lower.

The $A strengthened a little after slipping below ~US75.30c yesterday evening.

Locally pre-trade, AiG releases its April services sector activity index. April vehicle sales are due midday AEST.

Japan’s markets will be closed today through Friday due to public holidays.

Overseas Market Commentary

Major European and US equities markets diverged overnight, European markets trading for the first time this week and on some encouraging local data. In the euro zone, April manufacturing PMIs generally pleased, the overall regional reading at 56.7.

In the UK, the final April manufacturing PMI represented a 3.1-point rise to 57.3.

In addition, Greece achieved approval of its economic reform progress, sufficiently to qualify for ongoing rescue funding and to potentially achieve some debt relief.

In US data releases, ISM’s New York business activity index slipped 0.7 to 55.8.

National motor vehicle sales continued to fall during April.

Tonight in the US, the Federal Reserve announces outcomes from its policy meeting.

A private sector employment report, ISM’s April services sector activity index, Markit’s final April services PMI and weekly mortgage applications are also due.

AIG, Facebook, Groupon, Sainsbury’s, Time Warner, Volkswagen and Yum Brands are among companies due to report earnings or provide a trading update.

In overnight corporate news, BP reported an ~200% profit increase.

General Motors, Ford and Fiat Chrysler fell on weak sales, GM also suffering a $US100M charge on its Venezuelan manufacturing business.

Apple’s quarterly iPhone sales fell, viewed as likely due to a customer preference to own the 10th anniversary version. Apple reported post-US trade, so reactions will come in tonight’s trade.

Earlier in Italy, Alitalia (previously rescued by Etihad) requested administration proceedings.