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Research

Disclaimer: All information on this section is of a general nature.
Before making any investment decision, you should consult your adviser.

Market Opener – 05 Sep 2019

 
Local Markets Commentary
The Australian market commences today’s trade ahead of material domestic data late-morning, with several major stocks trading ex-dividend, following overnight gains for major international equities markets and key commodities.

This morning, China’s ambassador to Australia has labelled the US administration’s trade stance as bullying, and confirmed China was prepared to push back, despite not wanting a ‘trade war’.

Locally today, the Australian Bureau of Statistics (ABS) releases July international trade figures 11.30am AEST.

A plethora of stocks trades ex-dividend today including BHP and several other high-profile and large-cap companies. Please see p3 for a detailed list.

In overnight commodities trade, oil swung sharply higher. 

US gold futures (December) extended Tuesday’s strong gain, but at a modest pace.

Iron ore (Nymex CFR China, 62% Fe) turned and rallied beyond $US91.55/t.

LME copper and other base metals were ultimately propelled higher.

The $A approached US68.00c after appreciating beyond US67.90c early yesterday evening.

Overseas Market Commentary
Major European and US equities markets opened higher overnight, and most never seriously looked as though they could be headed. 

Early yesterday evening (AEST), Hong Kong chief executive Carrie Lam was reported to be preparing to withdraw potential legislation that would have enabled Hong Kong to transfer crime suspects to mainland China.

Major European and US equities markets opened higher overnight, and most never seriously looked as though they could be headed. 

Early yesterday evening (AEST), Hong Kong chief executive Carrie Lam was reported to be preparing to withdraw potential legislation that would have enabled Hong Kong to transfer crime suspects to mainland China.

The legislation, which had sparked protests that disrupted Hong Kong business and general activity, was subsequently formally withdrawn.

The news pushed the $US higher and gold lower, before respective turnarounds later in the US trading session.

The New York Fed president in the meantime promoted the US economy, but acknowledged a deteriorating outlook.

In the UK, the UK PM’s proposal for a 15 October election was knocked back, when Labour Party members abstained from the ultimate vote and only 298 parliamentary members voted for the plan (56 against), short of the required two-thirds majority.

The House of Commons has voted to request that the PM seek European Union approval to push back any UK-EU separation, to enable terms to be approved by the UK parliament. This must now be put to the House of Lords.

Among overnight data releases, the UK August services PMI fell by 0.8 to 50.6.

In the euro zone July retail sales pulled back 0.6% for the month but were 2.2% higher than a year earlier. Sales had risen by 1.2% during June, and were 2.8% higher than the previous June.

The euro zone August services PMI came in at 53.5, from 53.2 for July.

Germany’s August services PMI rose by 0.4 to 54.8.

In the US, the July trade deficit improved to $US54B from $US55.5B.

The Federal Reserve’s comprehensive district-by-district economic report (beige book) cited international trade concerns, broad agricultural sector woes, weakening manufacturing and supportive consumer spending in concluding the US economy was continuing to grow, in general, at a modest rate.

The ISM’s New York business activity index pleased, jumping to an expansionary 50.3 from a decidedly contractionary 43.5.

An economic optimism index dropped by 4.3 points however, to 50.8.

Weekly mortgage applications fell 3.1% following a 6.2% tumble the previous week, despite average 30-year mortgage rates declining to 3.87% from 3.94%.

Tonight in the US, ISM’s August non-manufacturing index is due, together with a final Markit services PMI and July factory orders. A private sector employment report, separate job cuts report, and weekly new unemployment claims are also due, ahead of national employment statistics tomorrow night.

Elsewhere, BHP and Glencore are among stocks trading ex-dividend on the FTSE 100.
 
5/09/2019 8:00:00 AM

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