Local Markets Commentary

The Australian market commences mid-week trade on higher overnight prices for key commodities, but continuing largely weak international equities leads.

The $A traded at new two-year peaks, after being pushed towards US79.40c early yesterday evening, but has since retreated a little.

In commodities trade, US gold futures continued higher and oil swung so. Iron ore picked up the pace of its most recent turn higher, approaching $US70/t. LME copper added slightly to Monday’s gain.

Locally today, the Melbourne Institute and Westpac publish their June leading indicators report 10.30am AEST.

The Bank of Japan commences a policy meeting from which outcomes will be announced tomorrow.

Overseas Market Commentary

All major European and US equities markets opened lower, but the S&P 500 index and the NASDAQ recovered sufficiently to record new peaks.

In the US, any further attempts at proposed new healthcare legislation looked likely to be deferred, at least temporarily. This propelled the $US yet lower on perceptions legislation underpinning planned tax and spending changes may struggle to progress under the current parliament.

Earlier, UK June CPI was estimated flat and the annual rate at 2.6%, following 2.9% for May. This pushed the British pound lower.

Producer prices rose 3.3% after a 3.6% rise in May.

In US data releases, June import and export prices each declined 0.2%, following 0.2% and 0.5% falls in May.

A home builders’ sentiment index also pulled lower, coming in at an eight-month low of 64, following 66 in June and forecasts of 67.

Tonight in the US, June housing starts and building permits are due, together with weekly mortgage applications.

Alcoa (post-US trade), American Express, Morgan Stanley and Qualcomm are among companies scheduled to report earnings.

In overnight corporate news, Goldman Sachs reported 17% lower quarterly trading revenue while exceeding earnings forecasts. A 2.6% (GS) price fall contributed to a negative DJIA settlement.

Bank of America exceeded both profit (+10%) and revenue expectations.

Netflix subscriber growth, revealed post-US trade Monday, pushed the stock to new highs, hence supporting tech sector sentiment in general and consequently the NASDAQ.

20% aeronautics division sales growth proved insufficient to lift Lockheed Martin’s price.