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State One Market Opener - 04 Nov 2016

Local Markets Commentary

The Australian market commences Friday trade on negative overnight equities leads.

In commodities trade, US gold futures turned lower. Oil continued so. LME copper rallied. Iron ore resumed its climb.

The $A appreciated again after trading at ~US76.65c yesterday evening.

Locally today (11.30am AEDST), the RBA publishes a quarterly monetary policy report, which will include inflation and GDP updates.

The ABS releases September retail trade figures. October vehicle sales are also due.

Overseas Market Commentary

Cats remained among pigeons overnight, Britain’s High Court ruling the UK parliament must first approve a triggering of the process for the UK to leave the European Union (EU).

This effectively jeopardises the proposed separation, and propelled the British pound higher.

The government is appealing on the grounds the public referendum was held under a parliamentary act, and the Supreme Court has set aside 5 – 8 December for a preliminary hearing.

In the meantime, major European and US equities markets mostly chopped their way to lower finishes again, ahead of US jobs figures tonight and the US presidential poll Tuesday next week.

In US data releases, ISM’s October services sector activity index fell 2.3 to 54.8, against expectations of 56.0.

Weekly new unemployment claims rose by 7000.

A job layoffs report reported 31% fewer cuts, totalling 30,740, however.

Hourly output per worker (non-farm productivity) was estimated to have risen 3.1% during the September quarter after falling 0.2% for the June quarter.

September (new) factory orders rose 0.3%, from a 0.4% gain in August, and unfilled orders fell.

Back in the UK, the Bank of England (BoE) had already prepared its latest inflation report, for release last night, based on the depreciation of the British pound since the 23 June decision to leave the EU.

The report lifted the 2017 and 2018 CPI growth forecasts to 2.7%, from 2% and 2.4% respectively, and put GDP growth at 1.4% (from 0.8%) for 2017 and 1.5% (from 1.8%) for 2018.

The BoE also held a monetary policy meeting, which resulted in status quo for rates and asset purchases.

Tonight in the US, the October employment report is keenly anticipated. September trade figures are also due.

Asics, Lion Corp, Marubeni and Mitsubishi Corp are scheduled to report earnings today and tonight.

Overnight, Facebook and Fitbit warnings hurt NASDAQ trade.

Earlier, Lenovo produced a $US157M quarterly profit, from a $US714M loss a year ago. Revenue dropped 8%, but an asset sale helped the overall result. In addition, last year’s loss was mostly due to restructuring.

4/11/2016 6:59:28 AM

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