Local Markets Commentary

The Australian market opens a new week’s trade amid heightened geopolitical tension, with US markets remaining closed until Tuesday, due to a Monday public holiday.

Yesterday, North Korea has claimed a successful test of a hydrogen bomb, following a major earth tremor recorded in the region where previous tests have been conducted.

In addition, the BRICS (Brazil, Russia, India, China, South Africa) annual summit commenced in Xiamen, Fuji province, China and will continue through tomorrow.

Locally today, a monthly data dump commences, ahead of the Reserve Bank of Australia’s (RBA) policy meeting tomorrow.

June quarter business indicators from the ABS, August job advertisements, as reported by the ANZ, and the Melbourne Institute’s monthly inflation report are due this morning.

A weekly capital city residential property price report will be published pre-trade.

In addition, several high-profile stocks trade ex-dividend today, including AMC and SUL. Please see p3 for a detailed list.

In overnight Friday commodities trade, gold continued to settle higher. Brent and WTI crude prices closed mixed and little changed. LME copper extended Thursday’s gain.

A public holiday in Singapore Friday, meant no updated price for iron ore (China port, 62% Fe), but futures continued to rally on the Dalian Commodities Exchange.

The $A was pushed to US79.70c.

Overseas Market Commentary

Major European and US equities markets opened higher overnight Friday and mostly never looked seriously headed, despite mixed US economic indicators.

The US is observing a national Monday public holiday weekend, so later-session trade proved relatively quiet.

Before then, however, the monthly jobs report revealed 156,000 jobs were created in August, at least 14,000 fewer than anticipated.

Further, the July jobs tally was revised 20,000 lower, to 189,000 and June’s by 21,000, to 210,000.

Unemployment rose 0.1% to 4.4%.

Weekly average earnings rose 0.1%, following a 0.3% gain in July.

ISM’s influential manufacturing index pleased, rising 2.5 points for the month to 58.8, the strongest reading since April 2011.

July construction spending was reported 0.6% lower, after a 1.4% fall for June, and following expectations of a 0.6% rise.

August vehicle sales were reported 2% lower than a year earlier, but industry watchers expect future sales to at least temporarily pick up on replacement demand from Texas.

A revised August University of Michigan consumer sentiment reading came in at 96.8, against the initially estimated 97.6.

Across the Atlantic, the UK August manufacturing PMI was calculated at 56.9.

In the euro zone a final reading confirmed a 57.4 August manufacturing PMI.

Meanwhile, Brazil reported a second consecutive quarter of GDP growth, officially ending what has been recorded as the nation’s worst recession. June quarter GDP rose 0.2% for the three months, and 0.3% year-on-year.

Tonight, US markets will remain closed due to a public holiday.