Local Markets Commentary

The Australian market opens Friday trade amid uncertainty regarding the results from the UK election, and ahead of new data out of China, plus a long weekend for a majority of Australian States and the ASX.

Initial UK election indications are anticipated this morning AEST, but exit polling has suggested a hung parliament.

This means the ruling party has lost its majority and no party has gained one. The British pound has subsequently dropped.

Some type of declaration is expected by early afternoon.

Regionally today, China is scheduled to publish May CPI and PPI ~11.30am AEST.

Locally, April lending finance figures, including for residential property purchases, are due, also at 11.30am.

In overnight commodities trade, gold futures picked up the pace of Wednesday’s turn lower. Oil settled slightly lower. Iron ore edged so. LME copper rallied.

The $A fell below US75.30c after trading at ~US75.50c early yesterday evening.

Overseas Market Commentary

Vacillating trade featured across most major European and US equities markets amid the UK general election, a US focus on intelligence investigations, and a slight change in European Central Bank emphasis.

In the UK, initial indications from the national parliamentary election put the ruling conservatives as having potentially lost their majority.

Across the Atlantic, immediate past (US) FBI director James Comey claimed administrative defamation while meeting with a Senate intelligence committee.

In US data releases, weekly new unemployment claims fell by 10,000 but this was 5000 fewer than forecast, but this was viewed as non-consequential ahead of next week’s Federal Reserve policy meeting.

Meanwhile, the European Central Bank (ECB) raised its euro zone 2017 economic growth forecast by 0.1% to 1.8%, but lowered its CPI growth prediction from 1.7% to 1.5%. The CPI forecast for 2018 was also lowered, by 0.3% to 1.3%.

In a post-policy meeting news conference, president Mario Draghi lauded the central bank’s policy as having fostered ‘extremely favourable’ regional financing.

The official written release differed from recent post-meeting communiqués, notably not mentioning rates possibly moving lower.

Prior to the meeting, Eurostat released a 1.9% final euro zone March quarter GDP reading, 0.2% higher than the previous estimate.

Earlier, Qatar had suffered a Standard & Poor’s credit rating downgrade, to AA- from AA

Tonight in the US, April wholesale inventories are due.

Monday, France votes in the first round of legislative elections.

In overnight corporate developments, Verizon revealed ~2100 jobs would go in association with its acquisition of Yahoo core business and the merger of this with AOL.

Morgan Stanley revealed plans to raise $US2B in order to establish a new Asia private equity fund.

Earlier, Alibaba predicted strong revenue growth, its stock subsequently appreciating ~13%.