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Market Opener – 27 May 2019

 
Local Markets Commentary
The Australian market commences opens a new week’s trade with public holidays in the US and UK, a significantly reduced US GDP growth prediction, positioning to appoint a new UK PM early-June, a pre-term election called yesterday in Greece, and the European Parliament election count underway, ahead of new data out of China today. 

In overnight Friday commodities trade, iron ore (China port, 62% Fe) rallied beyond $US105.30/t after slipping below $US104.t Thursday.

Oil seesawed higher.

US gold futures (June) turned slightly lower.

LME copper continued higher. Nickel swung higher and surged.

Due to the US and UK holidays, there will be no definitive international commodities trade leads until pre-ASX trade Wednesday.

The $A appreciated to ~US69.25c after trading at ~US69.00c early Friday evening. 

Regionally today, China’s April industrial profits are anticipated 11.30am AEST.

In Japan, Bank of Japan governor Haruhiko Kuroda is scheduled to speak publicly 1pm AEST.

Locally today, a weekly capital city residential property price report is due pre-trade.

Also today, ELD trades ex-dividend. Please see p4 for a detailed list.

Overseas Market Commentary
Varying degrees of risk appetite were demonstrated across major European and US equities markets overnight Friday, ahead of Monday public holidays in both the US and UK.

Key US indices noticeably pulled back from early gains by settlement.

Friday, China had again criticised the US’s approach to trade negotiations, while maintaining resolve to secure an agreement.

The US president in the meantime had commenced two days of US-Japan trade talks Friday, after late-Thursday speculating that the US’s position on Huawei could play some part in an ultimate deal with China and that China would be pushing for a deal in the very near term.

In the UK Friday, PM Theresa May announced she would step down from her leadership role 7 June.

In scant overnight Friday data releases, UK April sales did not fall as feared, but rather came in flat for the month, following a 1.2% March rise. 

Year-on-year, April sales were 5.2% higher. 

In the US, April durable goods orders fell 2.1% after increasing 1.7% in March, the monthly decline representing the largest in 2019 to date. Shipments were reported 1.6% lower.

The March figure had initially been reported as a 2.6% gain.

The $US subsequently declined and JP Morgan cut its June quarter US GDP growth prediction by 1.25%, to 1.0%.

Tonight, markets in the US and UK are closed due to public holidays.

Meanwhile, four days of voting concluded for the European Parliament elections yesterday, with exit-polling suggesting a more divisive outcome, with pro-EU candidates remaining largely in favour, but with a likely reduced majority, and with Greens, and in France, the far-right, scoring gains on traditional parties.

In overnight Friday corporate news, Amazon benefited from a forecast of a $US3000/share price by mid-2021 - mid-2022.

Foot Locker reversed 16% on a disappointing full year prediction that followed quarterly earnings that undershot expectations.

Post-Thursday US trade reporter HP Inc was pushed more than 4% higher after boosting its full-year profit forecast.

NB: US and UK markets (including the London Metals Exchange) will be closed Monday due to public holidays.
 
27/05/2019 8:00:00 AM

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