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Market Opener – 19 Sep 2019
Local Markets Commentary
The Australian market commences today’s trade with a Reserve Bank of Australia bulletin and influential domestic data due late-morning, and new US sanctions against Iran announced overnight, ahead of central bank meetings and subsequent policy statements in Japan today and the UK tonight, following an overnight cut in US rates.
Locally today, the Reserve Bank of Australia releases a quarterly bulletin with updated forecasts 11.30am AEST.
The Australian Bureau of Statistics reports August employment figures at the same time.
COH, CWN, SIG and SPK are among stocks trading ex-dividend today. Please see pp3-4 for a detailed list.
Regionally, the Bank of Japan holds a policy meeting, from which an outcomes statement is anticipated 1pm AEST.
This morning, New Zealand has reported 0.5% June quarter GDP growth, following 0.6% for the two previous quarters.
In overnight commodities trade, oil continued to pull back following Monday’s surge.
US gold futures (December) extended Tuesday’s slight gain, but have moved lower post-settlement.
Iron ore (Nymex CFR China, 62% Fe) recorded another slight fall, this time to close below US94.00/t.
LME copper was pushed lower again. Nickel turned higher.
The $A slipped to ~US68.30c after dropping below US68.35c early yesterday evening.
Locally today, the Reserve Bank of Australia releases a quarterly bulletin with updated forecasts 11.30am AEST.
The Australian Bureau of Statistics reports August employment figures at the same time.
COH, CWN, SIG and SPK are among stocks trading ex-dividend today. Please see pp3-4 for a detailed list.
Regionally, the Bank of Japan holds a policy meeting, from which an outcomes statement is anticipated 1pm AEST.
This morning, New Zealand has reported 0.5% June quarter GDP growth, following 0.6% for the two previous quarters.
In overnight commodities trade, oil continued to pull back following Monday’s surge.
US gold futures (December) extended Tuesday’s slight gain, but have moved lower post-settlement.
Iron ore (Nymex CFR China, 62% Fe) recorded another slight fall, this time to close below US94.00/t.
LME copper was pushed lower again. Nickel turned higher.
The $A slipped to ~US68.30c after dropping below US68.35c early yesterday evening.
Overseas Market Commentary
Vacillating trade featured across major European equities markets overnight, with some influential data releases in focus, and ultimately some better-than anticipated US housing figures dragging sentiment higher.
The US Federal Reserve’s policy meeting constrained key indices before an ultimate boost that achieved settlements at or near sessional peaks.
The lift came in the form of another Federal Reserve 0.25% rates reduction, bringing the range to 1.75% - 2.00%.
The overnight debt swap-for-cash was reduced to 1.70%.
Excess reserves interest will be charged at 1.80%, rather than just 0.15% above the top rate within the Fed’s range.
The differences between the views of the FOMC members were perhaps more notable than the rates changes.
Seven of the 17 members were revealed as currently in favour of another general rates cut by year’s end.
Two members advocated no September rate cut and one promoted a 0.50% cut.
Earlier, the Fed again boosted the amount of cash available for overnight borrowing, this time by a reported $US75B.
In the meantime, the US state secretary met with Saudi Arabia’s crown prince, describing the weekend oil operations attacks within Saudi Arabia as ‘an act of war’, as the US president announced new sanctions against Iran.
For its part, Saudi Arabia declared the attacks were ‘unquestionably sponsored’ by Iran.
Yemen’s Houthi military, which claimed responsibility for the attacks, from three sites in Yemen, further claimed it had identified ‘dozens of targets’ it could attack within the United Arab Emirates, including some in Abu Dhabi.
China and the US meanwhile prepared to commence ‘deputy-level’ trade talks in Washington.
In the UK, the Supreme Court continued to hear arguments in an appeal regarding the legitimacy of the current suspension of parliament, until a couple of weeks before the UK is scheduled to leave the European Union (EU).
The leaders of two EU nations asserted the EU needed written proposals, within two weeks, from the UK regarding what it wanted to change before another UK parliament vote.
Among overnight data releases, the UK’s August CPI growth was estimated at 0.4% for the month, following a flat result for July. Annual inflation came in at 1.7% growth.
A final August CPI reading for the euro zone represented 0.1% growth against expectations of a 0.2% rise, and following 0.5% July deflation. Annual CPI growth was confirmed at 1.0%.
August construction output rose 1.1% year-on-year, following a 1.6% July increase.
Among US, data releases, August housing starts jumped 12.3% for the month, to the most since June 2007, following a 1.5% July fall. Against August 2018, starts came in 6.6% higher.
Building permits increased by 7.7%, the most since May 2007, following a 6.9% July rise.
Weekly mortgage applications slipped 0.1% after rising 2% the previous week. Average 30-year mortgage rates rose to 4.01% from 3.82%.
Tonight in the US, weekly new unemployment claims are due, together with August existing home sales, the Philadelphia Fed manufacturing index and a Conference Board leading index report.
Elsewhere, the Bank of England holds a policy meeting from which it will publish a policy statement and offer much-anticipated commentary.
UK August retail sales are also due tonight.
The US Federal Reserve’s policy meeting constrained key indices before an ultimate boost that achieved settlements at or near sessional peaks.
The lift came in the form of another Federal Reserve 0.25% rates reduction, bringing the range to 1.75% - 2.00%.
The overnight debt swap-for-cash was reduced to 1.70%.
Excess reserves interest will be charged at 1.80%, rather than just 0.15% above the top rate within the Fed’s range.
The differences between the views of the FOMC members were perhaps more notable than the rates changes.
Seven of the 17 members were revealed as currently in favour of another general rates cut by year’s end.
Two members advocated no September rate cut and one promoted a 0.50% cut.
Earlier, the Fed again boosted the amount of cash available for overnight borrowing, this time by a reported $US75B.
In the meantime, the US state secretary met with Saudi Arabia’s crown prince, describing the weekend oil operations attacks within Saudi Arabia as ‘an act of war’, as the US president announced new sanctions against Iran.
For its part, Saudi Arabia declared the attacks were ‘unquestionably sponsored’ by Iran.
Yemen’s Houthi military, which claimed responsibility for the attacks, from three sites in Yemen, further claimed it had identified ‘dozens of targets’ it could attack within the United Arab Emirates, including some in Abu Dhabi.
China and the US meanwhile prepared to commence ‘deputy-level’ trade talks in Washington.
In the UK, the Supreme Court continued to hear arguments in an appeal regarding the legitimacy of the current suspension of parliament, until a couple of weeks before the UK is scheduled to leave the European Union (EU).
The leaders of two EU nations asserted the EU needed written proposals, within two weeks, from the UK regarding what it wanted to change before another UK parliament vote.
Among overnight data releases, the UK’s August CPI growth was estimated at 0.4% for the month, following a flat result for July. Annual inflation came in at 1.7% growth.
A final August CPI reading for the euro zone represented 0.1% growth against expectations of a 0.2% rise, and following 0.5% July deflation. Annual CPI growth was confirmed at 1.0%.
August construction output rose 1.1% year-on-year, following a 1.6% July increase.
Among US, data releases, August housing starts jumped 12.3% for the month, to the most since June 2007, following a 1.5% July fall. Against August 2018, starts came in 6.6% higher.
Building permits increased by 7.7%, the most since May 2007, following a 6.9% July rise.
Weekly mortgage applications slipped 0.1% after rising 2% the previous week. Average 30-year mortgage rates rose to 4.01% from 3.82%.
Tonight in the US, weekly new unemployment claims are due, together with August existing home sales, the Philadelphia Fed manufacturing index and a Conference Board leading index report.
Elsewhere, the Bank of England holds a policy meeting from which it will publish a policy statement and offer much-anticipated commentary.
UK August retail sales are also due tonight.