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Market Opener – 16 Sep 2019

Local Markets Commentary
The Australian market opens a new week’s trade with a:

• batch of influential data due out of China in the middle of the day;

• weekend attack in Saudi Arabia that knocked out ~50% of the kingdom’s oil production, and has been described by Saudi Arabia as ‘terrorist aggression’;

• subsequent warning from Iran that US military bases and vessels are within range of Iranian missiles, in a response to US accusations Iran was responsible for the Saudi oil attack; and

• scheduled meeting tonight of the UK PM, European Commission president and the European Union’s UK-EU separation chief negotiator.

US equities futures fell following news of the Saudi attack, and oil prices have surged.

Regionally today, China is due to release August industrial production, January-August fixed asset investment and August retail sales figures midday AEST.

Locally, stocks trading ex-dividend today include AQZ, HUB and ORA. Please see p4 for a detailed list.

In overnight Friday commodities trade, oil settled lower for a third consecutive session. Much higher prices are anticipated today, however.

Locally-listed oil producers are hence expected to benefit today.

US gold futures (December) turned moderately lower to settle below $US1500.0/oz.

Iron ore (Nymex CFR China, 62% Fe) extended its current move higher.

LME copper continued to rally. Nickel swung lower. Aluminium turned higher.

The $A changed little after trading at US68.75c early Friday evening, but has appreciated this morning.

Japan’s markets are closed today, due to a public holiday.

Overseas Market Commentary
Major European equities markets settled near session highs overnight Friday, but not so US key indices, amid a batch of economic indicator releases and plenty of geopolitical chatter.

Earlier Friday, China broadened its US goods import tax concessions to include agricultural products such as soybeans and pork.

In the UK, speculation abounded surrounding the potential implications of a pending UK Supreme Court decision.

The court is scheduled later today to hear an appeal of a High Court rejection of a challenge to the current government suspension, for which royal approval was secured by the recently-installed UK PM.

In addition, commentary was plentiful regarding a planned meeting later today and tonight between the UK PM and key EU officials, the UK PM insisting he would not be discussing any delay beyond 31 October for the planned UK-EU separation.

Among overnight Friday data releases, the euro zone’s July trade surplus surprised on the upside, rising to €24.8B from €20.3B.

In the US, August retail sales were calculated 0.4% higher for the month, following a 0.8% July rise. Sales were 4.1% higher than for August 2018.

Import and export prices fell 0.5% and 0.6% respectively for the month, and 2% and 1.4% year-on-year.

July business inventories came in 0.4% higher for the month following a static June estimate.

A University of Michigan preliminary September consumer sentiment reading came in 2.2 points higher than the final August reading, at 92.0.

Tonight in the US, the New York Fed’s Empire State manufacturing index is due.Elsewhere, the UK prime minister Boris Johnson is scheduled to meet with European Commission (EC) president Claude Juncker and the European Union’s (EU) chief negotiator for the UK’s planned withdrawal from the EU.

Meanwhile, the UK Supreme Court is scheduled to hear an appeal against a High Court decision to reject action against the government’s five-week suspension.
16/09/2019 8:00:00 AM

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