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Market Opener – 17 May 2019
Local Markets Commentary
The Australian market commences Friday trade one day out from a domestic national election, following positive overnight US equities trade and mixed key commodities leads.
Middle East tensions continue to ferment and US trade relations with north American neighbours, Europe, Japan and China remain fluid.
In overnight commodities trade, oil extended this week’s overall gains.
US gold futures (June) fell.
Iron ore (China port, 62% Fe) rallied further, past $US99.20/t, a five-year peak.
LME copper, nickel and aluminium turned a little lower.
The $A fell below US69.0c after trading at ~US69.25c early yesterday evening.
Middle East tensions continue to ferment and US trade relations with north American neighbours, Europe, Japan and China remain fluid.
In overnight commodities trade, oil extended this week’s overall gains.
US gold futures (June) fell.
Iron ore (China port, 62% Fe) rallied further, past $US99.20/t, a five-year peak.
LME copper, nickel and aluminium turned a little lower.
The $A fell below US69.0c after trading at ~US69.25c early yesterday evening.
Overseas Market Commentary
US equities markets headed higher overnight, supported by select corporate results and positive key data.
Major European indices were dragged higher, following jittery starts as Middle East relations bubbled.
Saudi Arabia’s Yemen coalition had earlier attacked Houthi targets, in Yemen, in an apparent retaliation to strikes against Saudi oil tankers and infrastructure this past week. The Houthis are backed by Iran.
Meanwhile, the US continued to build its Middle East military presence.
US trade issues also remained in focus, the US commerce secretary suggesting import taxes may indeed be imposed on vehicles from Europe and Japan by week’s end.
Among overnight data releases the euro zone March trade surplus was estimated at €22.5B from €19.1B at the end of February.
European Union regulators in the meantime penalised five banks a total €1B following a foreign exchange spot trade manipulation investigation.
In the US, the keenly-followed Philadelphia Fed manufacturing index jumped to 16.6 from 8.5 in April. This helped push the $US higher.
April housing starts also rose by more than anticipated, 5.7%, following a 1.7% March gain. Year-on-year, April starts were down 2.5%, however.
Building permits were reported 5% lower than for April 2018, but were 0.6% higher for the month, after falling by 0.2% during March.
Weekly new unemployment claims dropped by 16,000, double expectations.
Meanwhile, the British pound traded at three-month lows, supporting large exporters.
The fall came ahead of a planned new parliamentary vote, by early June, on arrangements to govern the UK’s separation from the European Union (EU), and on a new promise from the PM to set out a timetable for stepping down. Former foreign secretary Boris Johnson confirmed he would put up his hand to lead.
Tonight in the US, the Conference Board’s April leading index and the University of Michigan’s initial May consumer sentiment reading are due.
Elsewhere, the euro zone’s final reading of April CPI growth is anticipated.
The initial estimate came in at 1.2%, following 0.8% March growth.
Companies expected to report earnings later today or tonight include: EasyJet, Deere & Co, Eni, PetroChina Company and Porsche.
In overnight corporate news, US retailer Walmart earnings pushed the stock more than 1.5% higher, with revenue issues attributed to currency exchange. The company warned of price increases however, directly related to higher import tariffs.
China’s Baidu dropped after reporting a loss.
Network specialist Cisco Systems had reported better-than-anticipated quarterly earnings, and forecast pleasing June quarter revenue growth post-Wednesday US trade, benefiting overnight with an ~7% gain.
GlaxoSmithKline, Royal Dutch Shell and Tesco in the meantime traded ex-dividend on the FTSE 100, while Burberry dropped 6% after releasing earnings.
Nvidia and Pinterest have reported post-US trade. Nvidia has since appreciated, but Pinterest fallen, seemingly on guidance that has undershot early post-IPO expectations.
Major European indices were dragged higher, following jittery starts as Middle East relations bubbled.
Saudi Arabia’s Yemen coalition had earlier attacked Houthi targets, in Yemen, in an apparent retaliation to strikes against Saudi oil tankers and infrastructure this past week. The Houthis are backed by Iran.
Meanwhile, the US continued to build its Middle East military presence.
US trade issues also remained in focus, the US commerce secretary suggesting import taxes may indeed be imposed on vehicles from Europe and Japan by week’s end.
Among overnight data releases the euro zone March trade surplus was estimated at €22.5B from €19.1B at the end of February.
European Union regulators in the meantime penalised five banks a total €1B following a foreign exchange spot trade manipulation investigation.
In the US, the keenly-followed Philadelphia Fed manufacturing index jumped to 16.6 from 8.5 in April. This helped push the $US higher.
April housing starts also rose by more than anticipated, 5.7%, following a 1.7% March gain. Year-on-year, April starts were down 2.5%, however.
Building permits were reported 5% lower than for April 2018, but were 0.6% higher for the month, after falling by 0.2% during March.
Weekly new unemployment claims dropped by 16,000, double expectations.
Meanwhile, the British pound traded at three-month lows, supporting large exporters.
The fall came ahead of a planned new parliamentary vote, by early June, on arrangements to govern the UK’s separation from the European Union (EU), and on a new promise from the PM to set out a timetable for stepping down. Former foreign secretary Boris Johnson confirmed he would put up his hand to lead.
Tonight in the US, the Conference Board’s April leading index and the University of Michigan’s initial May consumer sentiment reading are due.
Elsewhere, the euro zone’s final reading of April CPI growth is anticipated.
The initial estimate came in at 1.2%, following 0.8% March growth.
Companies expected to report earnings later today or tonight include: EasyJet, Deere & Co, Eni, PetroChina Company and Porsche.
In overnight corporate news, US retailer Walmart earnings pushed the stock more than 1.5% higher, with revenue issues attributed to currency exchange. The company warned of price increases however, directly related to higher import tariffs.
China’s Baidu dropped after reporting a loss.
Network specialist Cisco Systems had reported better-than-anticipated quarterly earnings, and forecast pleasing June quarter revenue growth post-Wednesday US trade, benefiting overnight with an ~7% gain.
GlaxoSmithKline, Royal Dutch Shell and Tesco in the meantime traded ex-dividend on the FTSE 100, while Burberry dropped 6% after releasing earnings.
Nvidia and Pinterest have reported post-US trade. Nvidia has since appreciated, but Pinterest fallen, seemingly on guidance that has undershot early post-IPO expectations.