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Market Opener – 06 Dec 2018

Local Markets Commentary
The Australian market commences today’s trade a much-anticipated regular news briefing from China’s commerce ministry today, further influential domestic data, the commencement of two days of OPEC talks from later today, and a swag of key US data tonight. 

US equities markets did not trade last night.

Locally today, the October trade balance is due 11.30am AEDT, as are retail sales. 

Reserve Bank of Australia (RBA) deputy governor Guy Debelle is scheduled to speak on Lessons & Questions from the GFC, 8pm, at the Australian Business Economists annual dinner.

Regionally, the regular weekly China commerce ministry briefing will attract more attention than usual, due to little detail out of China following last weekend’s discussions between the presidents of China and the US.

In overnight commodities trade, oil swung lower.

US (February) gold futures also turned and declined. 

Iron ore (China port 62% Fe) extended its current positive run. 

LME copper continued lower but nickel turned to record a gain.

The $A fell to ~US72.70c after trading below ~72.95c early yesterday evening.

Overseas Market Commentary
Major European equities markets dropped on opening overnight and never looked like recovering. 

US equities and bond markets were closed last night during a declared national day of mourning, and as Washington hosted a state funeral service for former president George HW Bush.

Among early data releases, the euro zone’s final November services PMI was calculated 0.3 lower for the month, at 53.4.

October retail sales improved 0.3% for the month, following a 0.5% September fall, and were 1.7% higher year-on-year.

Germany’s services PMI fell 1.4 points to 53.3. 

In the UK, the November services PMI fell 1.8 to 50.4, approaching contraction mode for the first time in ~two years.

November new car sales dropped 3.0% year-on-year, following a 2.9% October fall.

Bank of England policy meeting minutes revealed a demonstrated focus on assessing the likely outcomes for the UK on its proposed withdrawal from the European Union (EU).

Meanwhile, UK parliamentary dissension continued as the proposed deal governing the separation was debated for a second day, this time after being presented for the first time with legal advice suggesting a UK-wide customs union (that is, including Northern Ireland and the Irish Republic) would likely remain in place indefinitely.

The Irish Republic is an EU member.

The US Federal Reserve’s region-by-region ‘beige book’ economic report, released overnight, indicated recent new trade tax higher-price impacts were broadening, and that modest inflation growth was continuing.

Meanwhile yesterday, China’s commerce ministry expressed confidence in a quick delivery of what the US and China agreed over the weekend, and described the dinner meeting between the presidents of both nations as a ‘great success’.

Tonight in the US, weekly new unemployment claims are due and a jobs layoff report, ahead of November national employment statistics tomorrow night.

Final October durable goods orders are also expected, together with a raft of key data initially scheduled for release Wednesday US time.

In addition, at least two Federal Reserve regional presidents are scheduled to speak, and perhaps chair Jerome Powell also.

Elsewhere, a third day of UK-EU separation plan debate in the UK parliament is scheduled, ahead of a fourth Monday next week, plus any amendments and a formal vote Tuesday (11 December).

In corporate news late yesterday, Takeda Pharmaceutical shareholders approved the proposed £46B acquisition of Dublin-headquartered drug manufacturer Shire Plc.

Facebook was accused in the UK parliament of engineering preferential data access details, according to private emails released in the parliament.
6/12/2018 7:00:00 AM

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