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Market Opener – 10 July 2018

Local Markets Commentary
The Australian market commences today’s trade on a further US equities rally, overnight gains for key base metals, political turmoil in the UK, and ahead of influential data today out of China. 

In overnight commodities trade, WTI crude closed slightly higher, while Brent rallied.

US gold futures turned modestly higher.

Iron ore (China port, 62% Fe) settled little changed.

LME copper, nickel and aluminium rallied. 

The $A returned to almost status quo after climbing to US74.60c early yesterday evening before heading yet higher.

Regionally today, China’s June CPI and PPI figures are expected 11.30am AEST.

Locally, NAB’s monthly business survey report is due, also at 11.30am AEST.

Pre-trade, a weekly consumer sentiment will be published.

CKF and MTS also trade ex-dividend today.

Overseas Market Commentary
US equities markets rallied on open overnight, gains never looking seriously threatened.

Germany’s DZX30 chopped throughout trade, however, and the UK’s FTSE 100 rallied significantly in late trade.

Financials appeared on favour on perceptions of US economic strength.

In the UK, government instability propelled the British pound lower against the $US and euro, after an initial cabinet resignation had pushed it higher.

Since late Sunday (UK time), the UK’s Brexit secretary, his deputy and foreign secretary have resigned.

They are protesting the PM’s proposal (delivered to cabinet overnight Friday) for arrangements governing the UK’s separation from the European Union.

The ministers claim the plan does not fulfil the spirit of the ‘leave’ vote, that it offers little that would represent an independent, and hence economically stronger, UK.

In the meantime, in the euro zone, a Sentix economic sentiment index moved notably, from 9.3 to 12.2, and following forecasts of just 8.2. 

Germany’s May exports rose 1.8% for the month and imports 0.7% after a 0.3% pullback for exports in April and 2.2% gain for imports.

The overall May trade surplus came in at €20.3B, against €19.4B at the end of April.

In scant US data releases, May consumer credit surprised, rising by $US24.6B (7.6%) following a $US10.3B increase in April.

Tonight in the US, a business optimism index and June job openings report are due. 

Companies scheduled to report earnings include Ocado and PepsiCo.

In overnight corporate news, Groupon was reported to be literally on the market and subsequently gained 10%.

Meanwhile, reports of up to 70M fake and/or suspicious accounts shut down by Twitter ultimately pushed the stock ~5% lower.

Digital payments specialist PayPal Holdings announced it intended to outlay an annual $1B - $3B on acquisitions in the near term, in the meantime selling its consumer credit portfolio for $US7B to Synchrony.

BP was reported to have offered in excess of $US10B for BHP Billiton’s US onshore shale assets.
10/07/2018 8:00:00 AM

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