Local Markets Commentary

The Australian market opens a new week’s trade on mixed commodities and positive equities leads, amid renewed security concerns, and ahead of two days of significant domestic data releases.

Several local economic indicators are due today, in the lead-up to tomorrow’s Reserve Bank of Australia (RBA) policy meeting.

Pre-trade, AiG publishes the national May services sector activity index.

The ABS releases March quarter business indicators (inventories and profits), and the ANZ its May job advertisements report at 11.30am AEST.

A weekly capital city house price index and May vehicle sales are also due today.

Regionally, Caixin is expected to release its China May services and composite PMIs 11.45am AEST.

In overnight Friday commodities trade, US gold futures swung higher and WTI crude turned lower. LME copper also declined, but iron ore changed direction again with a notable rally.

The $A was propelled ~0.5c higher after trading at ~US73.85c early Friday evening.

New Zealand’s markets are closed today, due to a public holiday.

Overseas Market Commentary

Major European and US equities markets faltered at the start overnight Friday, but quickly recovered an maintained positive momentum through to settlement. The FTSE 100 proved the exception, closing near its session low.

In the US, the May employment report placed earnings growth at 0.2% for the month, following 0.3% in April and representing a 2.5% mean improvement over the past year.

Jobs growth undershot expectations, 138,000 jobs created following forecasts of 178,000 - 185,000. Moreover, April’s reported 211,000 jobs was revised to 174,000, and March’s 79,000 to 50,000.

The unemployment rate slipped 0.1% to 4.3%, however, on a participation rate (62.7%) which continued to trend lower.

April’s trade deficit was in the meantime estimated 5.2% higher, at $US47.6B, following a 0.8% increase in imports against a 0.3% fall for exports.

Earlier, euro zone April producer prices were reported 4.3% higher from a year earlier.

In France, polling put new president Emmanuel Macron’s party in a strong position ahead of next Monday’s first round of the legislative election.

In the UK, the May construction PMI was calculated at a 17 month peak of 56.

Yesterday, campaigning ahead of Thursday’s national election was again suspended following another deadly attack on civilians.

The data keeps flowing tonight in the US, ahead of next week’s Federal Reserve policy meeting.

Two services sector activity indices are due, together with April factory orders, consumer credit and revised March quarter productivity figures.