Local Markets Commentary

The Australian market opens this week’s trade on the last day of the month, amid swelling international tension, and with a deluge of June quarter reports, ahead of China’s official July PMIs.

China is expected to report services and manufacturing activity indices 11am AEST.

Locally today, several economic reports are due, ahead of tomorrow’s Reserve Bank of Australia (RBA) policy meeting.

The ABS releases June financial aggregates (including private sector credit) 11.30am AEST.

The Melbourne Institute and TD Securities also publish a monthly inflation report this morning, and the HIA monthly home sales.

Pre-trade, a weekly capital city house price report is due. Post-trade, the RBA is due to report monthly reserves and foreign exchange liquidity.

In overnight Friday commodities trade, oil continued to gain. Gold futures settled higher for a second consecutive session. Iron ore (China port, 62% Fe) extended Thursday’s decline. LME copper settled slightly lower.

The $A traded above US79.85c, after falling below ~US79.50c early Friday evening.

Overseas Market Commentary

Major European and US equities markets opened lower overnight Friday, amid key data and corporate reports and a barrage of US domestic political commentary.

Among US data releases, the first of three June quarter GDP readings estimated annual growth at 2.6%, against 1.2% for the March quarter.

Employment costs rose 0.5% for the three months and 2.4% annually.

On the political front since then, the US president has:

• appointed a new chief of staff;

• threatened to stop support payments to health insurers, to thwart the health cover plan for parliamentarians, and not to approve other new legislation until a new healthcare plan passes both houses of parliament;

• agreed to approve new sanctions against Russia;

• berated China for perceived failure to curb North Korea’s nuclear missile program;

• and ordered the demonstration yesterday of US military air might over the Korean peninsula.

For its part, China revealed a new ICBM during a military parade, and Russia ordered the departure of more than 750 US diplomats.

Meanwhile, US treasury secretary Steven Mnuchin extended for two months an emergency cash measure to enable the US administration not exceed its debt limit.

Tonight in the US, June pending home sales, the Chicago PMI and a Texas region manufacturing index are due.

HSBC, Heineken, NEC and Panasonic are among companies scheduled to report earnings today or tonight.

In overnight Friday corporate news, Amazon’s quarterly growth costs and warning, delivered late-Thursday, appeared to impact tech sector sentiment on both sides of the Atlantic.