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Market Opener – 23 Oct 2018

 
Local Markets Commentary
The Australian market opens today’s trade again following largely indecisive overnight international equities and commodities trade.

Locally today, Reserve Bank of Australia (RBA) deputy governor Guy Debelle is scheduled to speak at an ISDA conference and on a panel at a Sibos conference, both in Sydney, 9.35am AEDT and 3.30pm AEDT respectively.

Two RBA assistant governors also join the panel at the Sibos conference, Lindsay Boulton (business services) at 12.30pm and Michele Bullock (financial system) at 2pm. 

Pre-trade, a weekly consumer confidence reading is due.

Also today, several high-profile companies are expected to provide updates as they host AGMs. Please see pp3-4 for a detailed list.

In overnight commodities trade, oil settled slightly higher.

US (December) gold futures traded modestly lower.

Iron ore (China port, 62% Fe) swung higher following Friday’s brief pullback.

LME copper and nickel gained further. Aluminium turned a little higher.

The $A dropped to ~US70.80c after pulling back early yesterday evening to US71.10c.

Overseas Market Commentary
Early falls and choppy, swinging trade continued across US equities markets overnight, evaporating some earlier resiliencemanifested by major European indices. 

International growth risks, plus broad geopolitical and domestic political issues on both sides of the Atlantic remained forefront, as earnings reporting season continued to influence select US trade. 

Yesterday, China had notably picked up the pace of Friday’s rally, this attributed to assurances of support from various administrators with the power to instigate and oversee various forms of possible stimulus, and following tough talk against the US.

Late-weekend, the US president had flagged tax cuts for middle income earners, with legislation possible before the 6 November mid-term elections, but with scant response to what was viewed as a throwaway comment, the president was forced to yesterday deliver a similar message directly to journalists, but one that conceded no legislation could be approved before the elections.

US-Saudi relations remained under pressure following the death of a journalist early this month inside a Saudi consulate in Turkey, prompting new high-level talks, and also an assurance from Saudi Arabia’s energy minister that he intended to keep Saudi oil trade separate from politics.

A threat for the US to withdraw from a longstanding nuclear arms deal, also delivered by the US president over the weekend, drew retaliatory talk from Russia.

In Italy, Monte dei Peschi bank was reported to be looking for ways to raise capital, as the Italian government confirmed to the European Union (EU) that it had no plans to change its current budget proposal.

In the meantime, the Bank of Japan had yesterday published a report warning the nation’s financial sector was ‘less resilient’ to economic shocks than past stress tests had indicated.

On the flip side, the central bank noted ‘active lending’ remained a feature of the financial system and national economy.

Further, during overnight trade, UK-EU difficulties at agreeing on proposals for the UK’s extrication from the EU were cited for a notable fall in the British pound and euro (-0.4%) against the $US. 

In scant overnight data releases the US Chicago Fed national activity index fell from 0.27 to 0.17 during September. 

Germany’s central bank’s (Bundesbank) monthly report indicated it expected September quarter GDP figures to reveal slowing growth, if not even a ‘temporary halt’.

Tonight in the US, a regional manufacturing index is due. In addition, results season warms and a Federal Reserve regional president is scheduled to speak publicly. 

Elsewhere, Bank of England governor Mark Carney is expected to speak publicly in Toronto, Canada. 

In Saudi Arabia, an investment forum commences tonight, but in the lead-up has gained a profile from the names deciding not to attend since the death of a journalist while inside a Saudi consulate in Turkey.

Companies scheduled to reveal earnings or provide updates later today or tonight include: 3M, Anglo American, Caterpillar, China Construction Bank, Chubb, Lockheed Martin, McDonald’s, POSCO, Texas Instruments and Verizon Communications.
 
23/10/2018 7:00:00 AM

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