Local Markets Commentary

The Australian market commences today’s trade on mostly negative international equities and commodities leads, ahead of new domestic economic indicators and a Reserve Bank of Australia (RBA) policy meeting.

The implications of a significant spat among five Arab nations, involving the closing of transport routes and removal of diplomatic services, will also continue to be assessed.

In overnight commodities trade, oil and LME copper continued to settle lower. US gold futures settled slightly higher. Iron ore (China port, 62% Fe) again switched direction to record a new fall.

The $A rose further after appreciating beyond ~US74.80c early evening.

Locally today, outcomes from the RBA’s policy meeting will be announced 2.30pm AEST.

Meanwhile, the ABS is due to publish March quarter current account figures 11.30am.

Pre-trade, construction sector activity and weekly consumer sentiment indices are due.

Overseas Market Commentary

Skittish trade returned to most major European and US equities markets overnight. Germany’s markets did not trade due to a public holiday.

Yesterday Qatar was diplomatically excised by Bahrain, Egypt, Saudi Arabia and the United Arab Emirates (UAE), the four nations alleging Qatar was enabling the funding of terrorist activities.

Air, land and sea passage links with Qatar are also being closed.

In overnight US data releases, a robust 56.9 for ISM’s non-manufacturing index appeared to worry some, as new orders fell 5.5% and the services sector reportedly accounts for ~67% of GDP calculations.

The fall in orders was notably the first in five months, and the overall reading represented a 0.6-point decline for the month.

April factory orders came in at 4.4% higher year-on-year, but slipped 0.2% for the month, following a 1% gain in March, but

March quarter productivity was confirmed in a follow-up estimate as having pulled back 0.6% annually.

A euro zone final May services PMI rose 0.1 from the initial estimate to 56.3, but the composite PMI remained at the original, and strong, 56.8.

This means the European Central Bank (ECB) is likely to comment again on data versus status quo policy following this Thursday’s policy meeting.

In the UK, surveys have again varied significantly regarding the likely majority the ruling (Tory) party could retain in Thursday’s national election.

Tonight in the US, economic optimism and job opportunity reports are due.

In overnight corporate developments, Apple suffered from an adverse research outlook assessment while promoting new plans.

Roche fell after a new compound breast cancer drug failed to demonstrate sufficient benefit over an earlier Roche product.