Local Markets Commentary

Influential regional data releases are due, and overnight international equities leads are negative, as the Australian market trades for the last time this financial year.

Regionally, China is expected to publish official services and manufacturing PMIs 11am AEST.

Japan releases a swag of May figures, including CPI (9.30am AEST), industrial production, workforce and household spending.

In overnight commodities trade, US gold futures were pushed lower. Oil continued modestly higher. LME copper picked up the pace of recent gains. Iron ore (China port 62% Fe) continued to rally.

The $A appreciated beyond US76.80c after trading above US76.70c yesterday evening.

Locally today, the Reserve Bank of Australia (RBA) releases May financial aggregates, including private sector credit - keenly anticipated ahead of the RBA’s policy meeting Tuesday next week. These are due 11.30am AEST.

Post-trade, the RBA also publishes international reserves and foreign exchange liquidity.

Overseas Market Commentary

Most major European and US equities markets traded lower on or near opening overnight, some broadening expectations of tighter international central bank policies blamed, and the tech sector decidedly out of favour in the US again.

Meanwhile, the euro traded at a 13-month high against the $US.

Euro zone economic and consumer sentiment indices were reported higher than forecast and exceeding last month’s readings.

Germany’s initial June CPI growth was reported at 0.2%, against expectations of a flat estimate and following a 0.2% fall in May.

In the UK, May mortgage approvals also surpassed expectations.

In US data releases, third and final March quarter GDP reading came in at 1.4% annual growth, against the second 1.2% estimate and initial 0.7% calculation.

Weekly new unemployment claims rose by 2000 following forecasts of a fall of similar magnitude.

In political developments, the US proposed to sever the US operations of Bank of Dandong, citing money laundering concerns on behalf of North Korea. The US is currently hosting a two-day visit by South Korea’s president.

Tonight in the US, core private consumption, personal income and spending, the June Chicago PMI and a final June University of Michigan consumer sentiment reading are due.

Schlumberger is scheduled to report interim results and Serco Group to provide a trading update.

In overnight corporate news, Walgreens Boots announced it was opting to purchase 2000 Rite Aid stores for $US5.2B, instead of pursuing a $US9.4B merger proposal in the face of regulatory hurdles.

BP revealed disappointing exploration in Angola would translate into a $US750M quarterly write-down.



US markets are heading into a shortened trading week, due to 4 July Independence Day commemorations.

The NYSE, NASDAQ, NYMEX and COMEX will close early Monday.

The NYSE and NASDAQ will remain closed Tuesday. NYMEX and COMEX will trade, but again close early.

Full trade resumes across all exchanges Wednesday.