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Market Opener - 24 May 2017

Local Markets Commentary

The Australian market opens mid-week trade on mostly lacklustre international equities leads.

In overnight commodities trade, oil extended a run of gains. US gold futures turned lower. LME copper continued a little higher. Iron ore turned and fell.

The $A slipped after trading at ~US75.0c early yesterday evening.

Locally today, monthly leading economic indicators, March quarter construction work and skilled vacancy reports are scheduled for release.

This morning, New Zealand has reported a $NZ3.48B trade deficit for the year to 30 April, following forecasts of $NZ3.71B.

Overseas Market Commentary

Major European and US equities markets mostly added to Monday’s gains following choppy overnight trade.

In the US, a detailed budget proposal was delivered to Congress, outlining plans to cut $US3.6 trillion worth of spending over 10 years, based on 3% GDP growth from the end of 2020.

Among a set of mostly underwhelming US data releases, April new home sales were reported to have dropped 11.4%, following forecasts of a 1.5% pullback.

A regional manufacturing index dropped 19 points to 1, against expectations of 15.

An initial May Markit manufacturing PMI was reported lower than for April, but the services sector activity index higher.

Across the Altantic, new economic indicators mostly pleased.

Germany’s final March quarter GDP growth was confirmed at 0.6%, following 0.4% for the December quarter 2016.

An IFO business climate index for Germany rose 1.6 over the past month to a 26-year peak of 114.6.

The euro zone’s initial May manufacturing PMI was estimated at a robust 57, supported by pleasing figures for both Germany and France.

Tonight in the US, May Federal Reserve policy meeting minutes are keenly anticipated, for clues on the timing of any asset sales and language regarding likely further rate moves.

In addition, April existing new home sales, a house price index and weekly mortgage applications are due.

Former FBI director James Comey was also scheduled to meet with a Congress committee tonight, but this was postponed yesterday.

European Central Bank (ECB) president Mario Draghi is scheduled to speak at a financial stability conference in Spain, after the release of the ECB’s latest financial stability review publication. The address also follows Germany’s central bank head and ECB official Jens Weidmann’s repeat call this week for an easing of ECB policy.

Babcock, HP, US retailer Lowe’s, UK retailer Marks & Spencer and Tiffany are scheduled to publish an update or earnings later today or tonight.

In overnight corporate news and developments, Nokia appreciated more than 6% on news of a patent dispute settlement with Apple.

Switzerland’s Glencore in the meantime was reported to be planning a takeover bid for US grain trader Bunge.

24/05/2017 7:49:10 AM

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