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Market Opener - 18 Jan 2017

Local Markets Commentary

The Australian market opens mid-week trade on largely negative leads.

US equities markets traded for the first time this week.

In overnight commodities trade, gold and WTI crude continued higher. Copper extended Monday’s fall. Iron ore turned lower.

The $A gained further after appreciating to ~US75.45c early yesterday evening.

Locally today, a monthly consumer sentiment report is due from Westpac and the Melbourne Institute, 10.30am AEDST.

This afternoon, a January employment indicator will be released.

China’s December property prices are expected 12.30pm AEDST. December quarter GDP is keenly anticipated Friday.

Overseas Market Commentary

Major European and US equities markets mostly fell on or near opening overnight, as the $US dropped and the British pound soared.

In the UK, PM Theresa May proposed a phased, but complete separation from the European Union, with to secure a free trade agreement, and said parliament would vote on the final negotiated deal.

December CPI growth in the meantime was reported at 1.6% year-on-year, against 1.2% for November and predictions of 1.4%.

At the annual World Economic Forum, an adviser to president-elect Donald Trump bemoaned the strength of the $US, echoing comments by Mr Trump late last week, but also stated Mr Trump had been misunderstood, and supported globalisation.

China’s president Xi Jinping promoted globalisation, warned of global economic inequalities and assured China would not commence a trade war.

The United Nations (UN) released a 2017 2.7% global economic growth forecast, 0.7% lower that the International Monetary Fund (IMF) forecast, citing both UK-European separation plans and US tax policies as risks.

In US data releases, a New York region manufacturing index was estimated 1.1 points lower for the month, at 6.5.

Tonight in the US, December CPI, industrial production figures and the Federal Reserve’s region-by-region economic beige book report are due, together with a homebuilders sentiment index.

Federal Reserve chair Janet Yellen is also scheduled to speak publicly.

Burberry Group, Citigroup, Goldman Sachs, Netflix, Premier Foods are due to report earnings and/or release trading updates.

In overnight corporate news, Morgan Stanley suffered despite 83% higher December quarter profit and 17% higher sales.

Health insurer UnitedHealth also fell after reporting 56% higher profit and a 9% rise in revenue.

US retailer Wal-Mart revealed it was planning to create 10,000 jobs in the US this year.

General Motors announced it would invest $US1B in US facilities this year.

18/01/2017 6:53:21 AM

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