Local Markets Commentary

The Australian market  opens Friday trade on mixed overnight international leads, ahead of influential US data tonight and China’s June industrial profits today, and approaching the end of domestic quarterly reporting season.

In overnight commodities trade, oil and iron ore (China port, 62% Fe) continued higher. 

US gold futures turned to resume their decline.

LME copper closed essentially flat. Nickel continued to gain. 

The $A headed yet lower, to US73.75c after falling below US74.25c early yesterday evening.

Locally today, June quarter producer prices are due 11.30am AEST.

China is also expected to release June industrial profits at 11.30am.

Overseas Market Commentary
Major European and USequities markets diverged overnight, NASDAQ and the S&P 500 falling onopening, but other key indices heading higher amid a cascade of earningsreports and currency swings.

Automakers supported the DAX.

Following its policy meeting, the European Central Bank (ECB) confirmed nodesire for a near-term rate rise, this pushing the euro 0.7% lower against the$US and 0.5% down with respect to the yen.

The ECB retained its plan to end bond purchases at the end of the year,however, and president Mario Draghi did not discount the chances of a rateincrease by the end of 2019.

In other currency moves, the British pound declined 0.65% against the $US andChina’s yuan fell 0.8%.

In the US House of Representatives, new legislation was approved, that amongother things, will curb Chinese and other foreign investment and limitparticipation in US government contracts. 

Among data releases, US June durable goods orders increased 1.0%, but a 3.0%improvement had been anticipated following a 0.3% fall in May. Core goodsorders rose by more than anticipated, however.

Wholesale inventories remained flat, defying forecasts of a 0.5% rise to followMay’s 0.6% gain.

Weekly new unemployment claims grew by 2000 more than expected. 

In Germany, the GfK consumer sentiment index slipped 0.1, as expected, to10.6. 

Tonight in the US, the first of three readings for Junequarter GDP growth and the University of Michigan’s July consumer sentimentupdate are due.

Companies due to report earnings or provide an update later todayand tonight include: AbbVie, Aon, BT, Chevron, Colgate-Palmolive,ENI, ExxonMobil,Fuji, Hitachi, Kia Motors, Komatsu, Merck, Reckitt Benckiserand Twitter.

In overnight corporate news, Facebook, which had reported post-UStrade Wednesday, dropped ~20% on last night’s opening, due to user growthand revenue concerns.

McDonald’s was pushed more than 1.5% lower, despite a smaller revenue fall (to$US5.35B) than expected but slower than forecast US sales growth.

Chip manufacturer Advanced Micro Devices was propelled 14% higher afterreporting a better-than-anticipated profit after previously booking a loss.

Comcast also gained, surpassing quarterly profit expectations.

Raytheon also exceeded industry predictions, but traded 2.5% lower.

Earlier, Royal Dutch Shell impressed with swollen profit and a $US25B buy-backprogram.

Total’s profit also rose sharply.

Post-US trade Amazon unveiled a $US2.5B quarterlyprofit, double industry calculations, and raised expectations for the currentquarter, but reported revenue undershot.