Local Markets Commentary

The Australian market commences the last trading session of the September quarter on a Friday, and a public holiday in Melbourne, ahead of the AFL grand final weekend and Monday public holidays in four States and/or Territories.

In addition, China and its markets are heading into a full week of National Day holidays.

Regionally today, there will be plenty to consider.

Caixin is due to release its preliminary September manufacturing PMI for China 11.45am AEST. China’s NBS is expected to release official PMIs tomorrow.

Japan will publish August CPI and employment figures 9.30am, and at 9.50am a Bank of Japan September policy meeting summary of opinions, and industrial production. A plethora of additional August statistics continues through the day.

Overnight international equities leads are mixed, but decidedly negative out of the US.

Commodities leads are mostly positive. Oil added to the previous session’s rally. Copper also extended gains. US gold futures and iron ore turned modestly higher.

The $A slipped below US76.40c after trading at ~US76.65c early yesterday evening, and has fallen further this morning.

Locally today, August new home sales and financial aggregates, including private sector credit, are due.

Forex liquidity and international reserves will be published post-trade.

Overseas Market Commentary

Major European and US equities markets mostly fell overnight, negative Deutsche Bank news mid-US trading session, and earlier disappointment with a Commerzbank report, bruising financial sector sentiment.

Anxiety regarding Deutsche Bank liquidity and derivatives exposure reportedly had up to 10 hedge funds withdrawing cash and reducing business with the bank.

Germany’s initial October CPI reading indicated 0.1% growth for the month and 0.7% year-on-year, slightly beating expectations.

In varied US data releases, a final June quarter 1.4% GDP growth reading bettered the previous estimate by 0.4%.

Weekly new unemployment claims rose 3000 but the four-week moving average fell 2250.

Pending home sales fell for the third consecutive month, this time by 2.4% in August.

Wholesale inventories slipped 0.1% following a flat result for July.

Tonight in the US, personal income and spending, a Chicago PMI and final September University of Michigan consumer sentiment reading are due.

Congress also needs to pass US government funding to enable operations to continue as normal.

Sovereign rating updates are due for Spain and the European Financial Stability Facility (EFSF).

Overnight, Germany’s second largest bank Commerzbank dropped after suspending dividend payments, while restructuring with the loss of 9600 current jobs and the creation of 2300 new positions.

Parliamentary testimony by (US) Wells Fargo’s CEO, regarding sales breaches, failed to assuage investors, further damaging the finance sector

Apple also suffered, on a price target cut by Barclays.