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Market Opener - 25 May 2017

Local Markets Commentary

The Australian market commences today’s trade on modest US equities gains, with scant commodities boost, and in the absence of major scheduled domestic or regional economic indicator reports.

In overnight commodities trade, oil pulled back. US gold futures settled lower again. LME copper swung lower. Iron ore’s latest fall picked up pace.

The $A was propelled beyond US75.00c after trading at ~US74.70c early yesterday evening.

Meanwhile, G7 leaders are preparing to commence this year’s summit later tomorrow in Sicily.

Overseas Market Commentary

US equities markets added to this week’s gains overnight, after opening higher and recovering throughout from vacillations. Major mainland European markets headed lower early.

In the US, May Federal Reserve policy meeting minutes revealed differences regarding the timing of any new rate rises and also to changes to asset holdings.

April existing new home sales were reported 2.3% lower for the month, this mostly attributed to tight supply.

Weekly mortgage applications rose 4.4%, however.

Germany’s GfK consumer sentiment index came in 0.2 higher for the month, at 10.4.

The European Central Bank’s (ECB) financial stability review was generally viewed as positive in tone, but revealed some bond market concern. Speaking publicly, president Mario Draghi again pointed out that regional underlying inflation remained ‘subdued’.

Tonight in the US, April trade balance and wholesale inventories, weekly new unemployment claims and another regional manufacturing index are due.

Later today, US president Donald Trump is due to meet in Brussels with the heads of the European Council and EU Commission, respectively Donald Tusk and Jean-Claude Juncker.

Mr Trump will also meet with NATO leaders at the opening of new alliance headquarters. France’s new president Emmanuel Macron will also be present.

AirAsia, Best Buy, Qinetiq (defence supplier) and United Utilities are scheduled to publish earnings later today or tonight. Morrisons (UK major supermarket chain) is due to trade ex-dividend on the FTSE 100.

In overnight corporate news, UK retailer Marks & Spencer was pushed lower on a disappointing profit result.

Specialist US retailers Lowe’s (home improvement) and Tiffany (jewellery) suffered respective 4% and 6% drops on quarterly results that undershot expectations.

Major mainland European markets will trade later today during Ascension Day, but volumes could fall below average.

25/05/2017 7:49:27 AM

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