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Market Opener – 05 Dec 2017

Local Markets Commentary
The Australian market opens today’s trade ahead of a Reserve Bank of Australia (RBA) post-policy meeting statement, which will come after a batch of economic indicator updates. 

The RBA holds its last policy meeting of the year, and will announce outcomes 2.30pm AEDST.

The Australian Bureau of Statistics publishes October retail sales and September quarter current account figures 11.30am. November vehicle sales are also expected middle of the day.

Pre-trade, a services sector activity index and weekly consumer sentiment report are due.

ALL and FPH also trade ex-dividend today.

In addition, the full Australian launch of Amazon is likely to produce plenty of commentary and influence select retail sector investor sentiment.

Regionally today, Caixin releases its final November services and composite PMIs for China.

Yesterday, China’s State Council Information Office revealed ‘new’ national economic challenges were dictating growth targets for 2018, expected to be announced anytime from this month through to March. 

In overnight commodities trade, US gold futures and oil were pushed lower.

Iron ore (China port, 62% Fe) was propelled higher for a second consecutive session, breaching $US72.65/t.

LME copper settled slightly lower, but nickel extended Friday’s rally.

Overnight international equities trade appeared to react to a range of domestic issues and geopolitical scenarios.

The $A largely remained range-bound after swinging below US75.90c and above US76.0c early evening.

Overseas Market Commentary
US equities markets notably rallied on opening but closed at session lows overnight. 

Major European equities mostly maintained gains, but not without some chop in the UK, largely attributed to a late-minute Republic-Northern Ireland border draft agreement that was scuppered by disagreement within the party supporting PM Theresa May’s government.

In geopolitical developments, North Korea had earlier again warned of nuclear war, and China and Russia urged a delay, but the US and South Korea commenced joint military air exercises as scheduled.

Reports also surfaced later that a former PM of Yemen had been killed in civil conflict, pushing Middle East alliance tensions higher.

In the US, ISM’s New York manufacturing index came in at a robust 58.1, from 51.6 last month.

October factory orders slipped 0.1% however, following a 1.7% gain for September. 

A euro zone investor confidence index fell 2.9 points to 31.1.

October euro zone producer prices were reported to have 0.4% for the month and 2.5% year-on-year, against 0.3% and 2.9% respectively in September.

In the UK a construction sector activity index rose 2.3 points to an encouraging 53.1.

Meanwhile, snags continued to frustrate UK-European Union separation plans.

Tonight in the US, the ISM’s November services sector activity index is due, together with October trade balance figures and Markit’s final November PMI estimates.

All the while, the US House of Representative holds its own tax legislation, distinct from the version narrowly approved over the weekend by Senate Republicans.
5/12/2017 7:11:00 AM

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