Local Markets Commentary

The Australian market opens mid-week trade following overnight rallies across key international equities markets.

In commodities trade, oil settled slightly higher. US gold futures turned lower. Copper fell further. Iron ore was reported to have pulled back slightly.

Locally today, Westpac and the Melbourne Institute publish a monthly consumer sentiment report. The ABS also reports November new vehicle sales.

A December quarter Tankan manufacturing index is due for Japan ~10.50am AEDST.

Overseas Market Commentary

Major European and US equities markets rallied overnight, well-received data, corporate activity and new record peaks for key US indices fuelling sentiment as the US Federal Reserve commenced a two-day policy meeting.

In the UK, November year-on-year CPI growth was revised 0.3% higher in a second reading, to 1.2%.

Germany’s November year-on-year CPI growth was confirmed at 0.8%.

Italy’s new PM assured the caretaker government was prepared to support the nation’s banking sector.

In the US, November import prices were reported to have fallen 0.3% after a 0.5% rise for October. Export prices pulled back 0.1% following no change in October.

Tonight in the US, the Federal Reserve will announce outcomes from its policy meeting (early Thursday AEDST). A rate rise is expected, and investors are keen for information on the likely timing of any subsequent moves.

In overnight corporate news, Italy’s UniCredit revealed further survival plans, including a €13B entitlement offer, up to 14,000 job cuts and bad debt sale.

The UK government revealed it now held less than 7% of Lloyds Banking Group, and Barclays that it had offloaded the balance of its European retail banking business.

Meanwhile, Fitch Ratings maintained a Deutsche Bank negative watch, citing ‘a sluggish business environment, particularly in Europe but also in Asia Pacific’.

Earlier, Japan’s Asahi reached a €7.3B deal to purchase five European beer brands from would-be SABMiller acquirer AB InBev.