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State One Market Opener - 01 Nov 2016

Local Markets Commentary

The Australian market commences Melbourne Cup Day trade with plenty to consider locally and regionally, on mixed commodities leads, and after US equities settled barely changed.

Locally today, the Reserve Bank of Australia (RBA) holds a policy meeting, from which outcomes will be known 2.30pm AEDST

Manufacturing and house price indices, plus a weekly consumer sentiment reading are also due.

Post-trade, the RBA publishes its October commodity price index report.

Regionally today, China PMIs are due from the NBS midday ADEST, and from Caixin (manufacturing only) 12.45pm.

The Bank of Japan (BoJ) also announces outcomes from its policy meeting ~2pm AEDST. A manufacturing PMI is due 11.30am.

In overnight commodities trade, oil and US gold futures turned lower. Iron ore was pushed yet higher. Copper settled modestly higher.

The $A remained within a narrow range after trading at ~US76.10c early yesterday evening.

Overseas Market Commentary

Choppy trade featured across major European and US equities markets overnight. Key indicators came in mixed and oil and gold prices turned lower, at the beginning of a significant week of central bank meetings and influential economic data.

In the US, September personal income and spending figures were considered encouraging, spending improving 0.5% after pulling back 0.1% in August, and pointing to an upward revision for September quarter GDP.

Income rose 0.2% on top of a 0.2% increase in August.

The Chicago PMI fell 3.6 points to 50.6 however, against expectations of a slight improvement to 54.3.

The Dallas Fed (Texas region) manufacturing index moved 2.2 points higher, but at -1.5, remained in contraction mode.

Across in the euro zone, an initial October CPI reading placed inflation growth at a two-year peak of 0.5%. Core CPI was estimated at 0.8%.

September quarter GDP growth was reported at 0.3% for the quarter and 1.6% annually.

Germany’s September retail sales dropped 1.4%, following forecasts of a 0.2% rise.

Speculation surrounding the likely tenure of Bank of England governor Mark Carney quietened when he confirmed he planned stay on one year past his initial five-year contract, but leave when the UK completed its separation from the European Union, likely June 2019.

Tonight in the US, a two-day Federal Reserve policy meeting commences. In addition, ISM’s manufacturing index, October construction spending and a Markit final October manufacturing PMI are due.

Archer Daniel Midlands, BP, Kellogg, Nippon Steel, Pfixer, Royal Dutch Shell, Standard Chartered, Sony and Tata Motors are among companies scheduled to report earnings and/or provide trading updates today and tonight.

Overnight, General Electric and Baker Hughes confirmed an agreement to merge GE’s oil and gas business with Baker Hughes, to form a 62.5:37.5 entity.

Earlier in Japan, Sony and Panasonic had each lowered profit guidance.

1/11/2016 6:53:32 AM

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