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Market Opener – 15 Oct 2019

 
Local Markets Commentary
The Australian market opens today’s trade with:

• the US threatening additional tariffs against goods from China 15 December should no trade deal be agreed;

• US sanctions and tariffs announced against Turkey;

• Reserve Bank of Australia (RBA) policy meeting minutes due late morning;

• further material data scheduled for release out of China early afternoon; and

• heightened international concern at the potential of conflict in Syria;

• ahead of key US corporate reports tonight.

China is scheduled to release September CPI and producer prices 12.30pm AEDT.

Locally today, the RBA publishes the minutes of its October policy meeting, 11.30am AEDT.

A weekly consumer sentiment reading is due pre-trade.

ORA and TLS convene AGMs today.

In overnight commodities trade, oil turned and fell.

US gold futures (December) seesawed higher.

Iron ore (Nymex CFR China, 62% Fe) extended Friday’s move lower.

Meanwhile, China’s September iron ore imports have been revealed 4.8% higher for the month, at 99.36Mt, against 93.47Mt for September 2018.

LME copper rose. Nickel dropped. Aluminium continued to decline.

The $A rose towards US67.80c after trading at US67.65c early yesterday evening, but could swing today.

In addition, Japan’s markets will be trading for the first time this week, and hence potentially reacting to developments from late Friday last week.

Overseas Market Commentary
Choppy trade featured across major European and US equities markets overnight, during a Columbus Day government and bank holiday in the US and a public holiday in Canada.

There was plenty to consider, including the realisation of little definitive detail out of the China-US trade talks, growing international concern at the potential broadening of conflict in Syria, the US president threatening near-term sanctions against Turkey, and seemingly lowered EU-UK expectations for this week, ahead of influential US corporate reporting tonight and the recommencement of US Federal Reserve debt purchases.

For its part, China requested to clarify before month’s end what had been verbally agreed with the US late last week, before a potential paper sign-off on the ‘phase one’ accord.

In addition, earlier yesterday, China’s September international trade figures revealed a further weakening in exports and imports.

In monetary policy developments, the US Federal Reserve had followed up chairman Jerome Powell’s earlier-month revelation the central bank would boost reserves and bolster overnight cash availability, announcing late Friday that monetary policy council (FOMC) members had approved the monthly purchase of $US60B worth of US Treasury bills (government bonds), from as early as tonight.

The Fed also announced the new purchase program, in conjunction with broadening repurchasing operations, would extend at least until the end of March 2020.

Mr Powell had assured in public speeches within the past two weeks that the additional measures did not represent a change in monetary policy, but rather were ‘technical’ responses to current demand.

Last month, this demand had forced a string of substantial overnight Fed cash injections.

In scant overnight data releases, the euro zone’s August industrial production rose 0.4% for the month following a 0.4% July decline.

Year-on-year, output was down 2.8%.

Tonight in the US, the New York Fed’s regional manufacturing index is due.

Companies scheduled to report for the September quarter include: Bank of America, BlackRock, Charles Schwab, Citigroup, CSX, Goldman Sachs, Johnson & Johnson, JPMorgan, Morgan Stanley, Rio Tinto, UnitedHealth and Wells Fargo.
 
15/10/2019 7:00:00 AM

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