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Market Opener – 15 May 2019

Local Markets Commentary
The Australian market commences mid-week trade following an overnight international equities trade bounce, ahead of influential data out of China today, and two key domestic economic indicator reports this morning, plus a swag of key US economic figures and a euro zone GDP reading tonight.

China’s April industrial production, fixed asset investment and retail sales statistics are anticipated midday AEST. 

Locally today, the Australian Bureau of Statistics (ABS) releases the March quarter wage price index 11.30am AEST.

The monthly consumer sentiment report from the Melbourne Institute and Westpac is due 10.30am AEST. 

In addition today, AGM updates are in hand from stocks including APE, GPT and SIG. 

In overnight commodities trade, oil rebounded.

US gold futures (June) turned lower.

Iron ore (China port, 62% Fe) extended Monday’s fall.

LME copper swung higher. Nickel and aluminium rallied decisively. 

The $A proved effectively becalmed after trading at ~US69.45c early yesterday evening.
Overseas Market Commentary
Risk tolerance returned to major European and US equities markets overnight. 

Earlier, China had claimed the US had altered some of the terms of negotiated during trade negotiations earlier this month, but also touted ‘ability and wisdom’ in the US and China, sufficient to achieve a trade agreement.

The US president also promoted the ‘likely success’ expectations he has repeated over several months.

Among decidedly mixed overnight data releases, UK March average earnings rose 3.3%, following 3.4% for February.

Unemployment slipped by 0.1% to 3.8%.

A preliminary March quarter productivity index fell 0.6% however, against a 0.3% December quarter 2018 rise.

In Germany, a final April CPI reading represented 1.0% growth for the month and 2% year-on-year, following just 0.4% and 1.3% respective March figures.

The ZEW economic sentiment index dropped to -2.1 from 3.1, however.

The euro zone’s March industrial production declined 0.3% for the month and 0.6% year-on-year, following a 0.1% slip and flat annual rate for February.

The region's ZEW economic sentiment index slid from 4.5 to -1.6.

In the US, April import prices were reported 0.2% higher for the month and 0.2% lower year-on-year, against respective 0.6% and 0.1% March gains.

Export prices also rose 0.2% for the month, and were 0.3% higher year-on-year, after rising 0.6% each for the month and year—on-year in March.

A business optimism index was reported yet 1.7 points higher, at a robust 103.5.

Tonight in the US, April retail sales, industrial production, the New York Fed regional manufacturing index, a home builders’ housing market index and March business inventories are due, together with weekly mortgage applications. 

Elsewhere, a final March quarter GDP reading is keenly anticipated for the euro zone. Germany’s initial estimate is also expected.

Yields for a 30-year German bond auction will also be closely watched. 

Companies expected to report earnings later today or tonight include: Alibaba Group, Cisco Systems, Credit Agricole, Dai-ichi Life, Kraft Heinz, LG Corp, Lloyds Banking, Macy’s, Mitsubishi UFJ Financial, RWE, Samsung Life, Singapore Telecommunications, Tui and William Hill.
15/05/2019 8:00:00 AM

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