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Market Opener - 08 Jun 2017

 
Local Markets Commentary

The Australian market could chop and swing today. Trade commences on positive US equities but mostly negative key commodities leads, ahead of influential regional and domestic economic indicators and several keenly anticipated events and releases tonight.

Australia’s May trade balance is due 11.30am AEST.

Regionally, China’s May trade figures are anticipated midday AEST.

Meanwhile, Japan is expected to release a final March quarter GDP, together with April current account figures 9.50am.

Overnight, the Organisation for Economic Cooperation & Development (OECD) published its latest outlook report, which included annualised 2.9% GDP growth for Australia by the end of 2018, with the proviso of no major residential property price drops and economic stability for China.

The headline figure contrasts with yesterday’s ABS revelation of 1.7% March quarter growth, based on just 0.3% for the quarter, but the OECD addressed what it viewed as the major contributing factors for this result.

In overnight commodities trade, gold turned lower. Oil dropped. Iron ore continued volatile, swinging to another fall. LME copper settled slightly higher.

The $A slipped after trading beyond ~US75.60c early yesterday evening.

Overseas Market Commentary

Major European and US equities markets chopped and swung overnight, but while European indices settled at or near session lows, key US indices achieved the opposite.

Among data releases, US April consumer credit was calculated $US8.2B higher for the month, with borrowing slowing 2.8% annually, the lowest rated in almost six years.

Weekly mortgage applications were reported 1.7% higher, supported by interest rates at six-month lows, 30-year loans at 4.14%.

Germany’s April factory orders dropped 2.1% following a 1.1% rise in March.

Meanwhile, France continued to prepare for Monday’s first round of parliamentary elections.

In the UK, political campaigning wound up with domestic health care, UK-EU separation and security issues remaining firmly in focus.

Earlier, the OECD’s released its latest outlook report, raising expected global 2017 economic growth by 0.2% to 3.5%. Next year’s predicted rate came in at 3.6%.

The OECD noted an expected reduction in UK business investment during EU separation negotiations.

Tonight in the US, recent FBI director James Comey will provide prepared testimony from a Senate intelligence committee.

Mr Comey’s appearance was delayed last month, so as to allow Justice Department special counsel and former FBI director Robert Mueller to first meet with Mr Comey.

Mr Mueller was appointed by the department to head an investigation into Russia-US relationships.

In data releases, weekly new unemployment claims are due.

In the UK, it’s polling day for the national election. Initial indications are due early tomorrow AEST.

Meanwhile, tonight’s European Central Bank (ECB) post-policy meeting news conference is keenly anticipated for any new emphases and forecasts.

A final euro zone March quarter GDP reading is also scheduled for release and any significant difference is likely to further pressure the ECB.

Companies providing updates today and tonight include Alibaba Group which has scheduled two days of briefings.

In overnight corporate developments, Spain’s Banco Santander heeded an ECB assessment that competitor Banco Popular Español could fail and agreed to buy the bank for €1. To effect a rescue however, Banco Santander must raise €7B.

 
8/06/2017 7:45:14 AM

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