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Market Opener - 19 May 2017

Local Markets Commentary

The Australian market commences Friday trade on positive US equities but mostly negative major commodities leads.

In overnight commodities trade, US gold futures pulled back. Oil continued higher. LME copper headed lower, as did iron ore (China port, 62% Fe).

The $A was retained in a relatively narrow range after trading at ~US74.40c yesterday evening.

Later today, Iran holds its presidential election, one that will be watched in light of likely foreign policy implications.

Overseas Market Commentary

Major European and US equities markets traded lower early overnight, but key US indices recovered to settle higher on reassuring data, corporate news and outlook commentary.

European Central Bank (ECB) April policy meeting minutes revealed a more optimistic tone, but as expected, a reluctance to yet loosen policy.

UK April retail sales improved 4% year-on-year, pushing the April quarter results to a 2.3% rise, following a 1.4% fall for the March quarter.

Warmer-than-usual spring weather and a late Easter were viewed as supporting factors.

Meanwhile, PM Theresa May publicly outlined the government’s case for re-election at the 8 June poll.

In the US, a Federal Reserve official whose views have been broadly respected, offered no opinion on preferable timing for additional rate rises, but declared the domestic economy supported higher rates.

Weekly new unemployment claims fell 4000 following forecasts of a rise.

A Philadelphia manufacturing index surprised on the upside, rising by 16.8 to 38.8.

Tonight in the US, a Federal Reserve official is scheduled to speak on the national economy and monetary policy.

Campbell Soup, Deere & Co and Foot Locker and are among companies scheduled to publish earnings or an update today or tonight.

In overnight corporate news, retail stocks remained in focus.

Alibaba and Walmart quarterly revenue and/or profit sufficiently pleased. Alibaba revenue improved 60% and Walmart’s stock was pushed 5% higher.

Burberry suffered in the UK after reporting disappointing business.

A positive lung cancer clinical trial involving Merck and Incyte proposed treatments helped boost the health sector in general.

On the FTSE 100, HSBC and Royal Dutch Shell traded ex-dividend.

19/05/2017 7:49:03 AM

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