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Market Opener – 26 Jul 2019
Local Markets Commentary
The Australian market opens Friday trade amid simmering regional tensions, following generally negative overnight international equities sentiment, a dour assessment of euro zone economic growth prospects, and some positive key US data in hand, ahead of a US GDP reading tonight.
In addition, post-US trade, the US House of Representatives has approved a debt ceiling and budget deal agreed late-Monday between the US administration and leaders of each house.
Since then, North Korea has also confirmed that yesterday’s launch of a new guided missile was in part in protest at South Korea’s weapons imports and joint military exercises with the US.
Locally today the Reserve Bank of Australia (RBA) releases its Low Wages Growth conference papers and discussion summaries, 3pm AEST.
Regionally, China’s June industrial profits are due for release tomorrow.
In overnight commodities trade, oil turned modestly higher.
US gold futures (August) swung lower.
Iron ore (China port, 62% Fe) again edged slightly lower, approaching $US120.00/t.
LME copper was pushed a little lower. Nickel dropped after rallying Wednesday.
The $A fell towards US69.50c after trading at US69.65c early yesterday evening.
In addition, post-US trade, the US House of Representatives has approved a debt ceiling and budget deal agreed late-Monday between the US administration and leaders of each house.
Since then, North Korea has also confirmed that yesterday’s launch of a new guided missile was in part in protest at South Korea’s weapons imports and joint military exercises with the US.
Locally today the Reserve Bank of Australia (RBA) releases its Low Wages Growth conference papers and discussion summaries, 3pm AEST.
Regionally, China’s June industrial profits are due for release tomorrow.
In overnight commodities trade, oil turned modestly higher.
US gold futures (August) swung lower.
Iron ore (China port, 62% Fe) again edged slightly lower, approaching $US120.00/t.
LME copper was pushed a little lower. Nickel dropped after rallying Wednesday.
The $A fell towards US69.50c after trading at US69.65c early yesterday evening.
Overseas Market Commentary
Sapped sentiment influenced most overnight major European and US equities markets, some of this due to corporate earnings reports from both late-Wednesday and pre-trade.
In geopolitical news, China confirmed US-China in-person high-level trade talks in Shanghai from Tuesday next week.
In the meantime, North Korea tested a new guided missile.
The European Central Bank (ECB) post-policy meeting statement indicated a possible rate cut in September, this immediately pushing the euro lower.
Further, during the post-policy press conference, president Mario Draghi did not shy away from suggestions new stimulus was likely, including the reintroduction of asset buying.
Mr Draghi described the economic outlook for the euro zone as becoming ‘worse and worse’, after the official statement predicted rates through to mid-2020 would not exceed present levels.
These comments came as speculation continued to foam regarding the US Federal Reserve’s policy meeting next week.
In the UK, the new PM emphasised his determination that the UK separate from European Union (EU) by the 31 October scheduled deadline.
An IFO business climate index for Germany was estimated at 95.7, against 97.4 in June.
Among US data releases, June durable goods orders surprised on the upside, improving by 2% for the month, following a 2.3% May drop, and forecasts of a 0.7% bounce.
A Kansas Fed manufacturing index tumbled to -6 from -3.
Weekly new unemployment claims fell by 10,000, against expectations of an ~4000 increase.
Post-overnight US trade, the US House of Representatives approved (284 – 149) a two-year debt ceiling and budget funding plan agreed between US administrative officials and the two key parliamentary leaders.
Meanwhile, Turkey’s central bank had lowered its key lending rate by 4.25 per cent, to 19.75%. This followed the previous central bank head’s departure for not following the president’s rate cut orders.
Tonight in the US, an initial estimate of June quarter GDP growth is expected to draw plenty of commentary ahead of next week’s Federal Reserve policy meeting.
Companies scheduled to report earnings later today and tonight include: Audi, Colgate-Palmolive, Daewoo Engineering & Construction, ENI, Goodyear, McDonald’s, Nestlé, Phillips 66, Renault, Ssangyong Motor and Twitter. Vodafone is expected to provide an update.
In overnight corporate news, Apple revealed it was planning to buy most of Intel’s modem business, raising speculation about alliances with Qualcomm and Global Unichip (supported by Apple supplier Taiwan Semiconductor), and also possible deals with 5G patent holders Ericcson, Huawei, Nokia.
Bristol-Myers Squibb provided some earnings season encouragement with both quarterly profit and full-year guidance. Traders in turn pushed the stock 5% higher.
Facebook, Ford and Tesla had reported post-Wednesday US settlement and led early falls after undershooting expectations and/or providing weaker-than-hoped for outlooks.
Several new results are likely to influence tonight’s early trade, including Alphabet, Amazon and Intel which feature among stocks having reported post-US settlement.
In geopolitical news, China confirmed US-China in-person high-level trade talks in Shanghai from Tuesday next week.
In the meantime, North Korea tested a new guided missile.
The European Central Bank (ECB) post-policy meeting statement indicated a possible rate cut in September, this immediately pushing the euro lower.
Further, during the post-policy press conference, president Mario Draghi did not shy away from suggestions new stimulus was likely, including the reintroduction of asset buying.
Mr Draghi described the economic outlook for the euro zone as becoming ‘worse and worse’, after the official statement predicted rates through to mid-2020 would not exceed present levels.
These comments came as speculation continued to foam regarding the US Federal Reserve’s policy meeting next week.
In the UK, the new PM emphasised his determination that the UK separate from European Union (EU) by the 31 October scheduled deadline.
An IFO business climate index for Germany was estimated at 95.7, against 97.4 in June.
Among US data releases, June durable goods orders surprised on the upside, improving by 2% for the month, following a 2.3% May drop, and forecasts of a 0.7% bounce.
A Kansas Fed manufacturing index tumbled to -6 from -3.
Weekly new unemployment claims fell by 10,000, against expectations of an ~4000 increase.
Post-overnight US trade, the US House of Representatives approved (284 – 149) a two-year debt ceiling and budget funding plan agreed between US administrative officials and the two key parliamentary leaders.
Meanwhile, Turkey’s central bank had lowered its key lending rate by 4.25 per cent, to 19.75%. This followed the previous central bank head’s departure for not following the president’s rate cut orders.
Tonight in the US, an initial estimate of June quarter GDP growth is expected to draw plenty of commentary ahead of next week’s Federal Reserve policy meeting.
Companies scheduled to report earnings later today and tonight include: Audi, Colgate-Palmolive, Daewoo Engineering & Construction, ENI, Goodyear, McDonald’s, Nestlé, Phillips 66, Renault, Ssangyong Motor and Twitter. Vodafone is expected to provide an update.
In overnight corporate news, Apple revealed it was planning to buy most of Intel’s modem business, raising speculation about alliances with Qualcomm and Global Unichip (supported by Apple supplier Taiwan Semiconductor), and also possible deals with 5G patent holders Ericcson, Huawei, Nokia.
Bristol-Myers Squibb provided some earnings season encouragement with both quarterly profit and full-year guidance. Traders in turn pushed the stock 5% higher.
Facebook, Ford and Tesla had reported post-Wednesday US settlement and led early falls after undershooting expectations and/or providing weaker-than-hoped for outlooks.
Several new results are likely to influence tonight’s early trade, including Alphabet, Amazon and Intel which feature among stocks having reported post-US settlement.