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Market Opener – 12 Apr 2019

Local Markets Commentary
The Australian market commences Friday trade, for the last full trading week in April, ahead of influential figures out of China and a late-morning release of Reserve Bank of Australia’s (RBA) semi-annual financial stability review report, following mostly negative overnight key commodities trade.

Regionally today, China is due to report March trade statistics 1pm AEST.

Locally, the RBA’s financial stability review report, due 11.30am AEST, is keenly anticipated on a number of fronts, but will be parsed in particular for any change in growth outlook commentary.

In overnight commodities trade, oil turned lower again.

US gold futures (June) dropped well below $US1300/oz, and beneath $US1295/oz.

Iron ore (China port, 62% Fe) swung higher to new five-year peaks.

LME copper, nickel and aluminium continued to decline.

The $A fell to ~US71.25c, after trading at ~US71.55c early yesterday evening.

International Monetary Fund and World Bank meetings, officially commencing tonight, are expected to deliver more than the usual volume of global economic commentary and could impact currency trade heading into next week.

Overseas Market Commentary
Caution appeared to prevail across most major European and US equities markets overnight, ahead of a flurry of post-settlement speeches from US Federal Reserve officials and the pending commencement of major earnings season, amid falling key commodities prices.

The US and South Korea presidents met in Washington, prompting threats from North Korea’s leader.

Meanwhile in Sudan, the military pushed out the north east African nation’s president of almost 30 years, and announced a two-year transition to new leadership.

This expanded talk of extended unrest fears in Algeria, also.

Back in Washington, for International Monetary Fund (IMF and World Bank Spring meetings, the IMF’s MD and Bank of England governor both expressed relief UK had been granted another opportunity to secure optimal arrangements for its planned separation from the European Union (EU).

Overnight data releases included US March producer prices which surprised on the upside, rising 0.6% for the month and 2.2% year-on-year, against 0.1% and 1.9% respective gains in February.

Weekly new unemployment claims fell by 8000.

Among other data releases, Germany’s March CPI growth was confirmed in a final reading as 0.4% for the month, the same as for February.

Year-on-year, March CPI rose 1.3%, against 1.5% for February.

In France, inflation grew 0.8% during March following no change in February.

France’s year-on-year inflation was reported at 1.1%, following 1.3% for February.

Tonight in the US, March export and import prices and a preliminary March University of Michigan consumer sentiment reading are due. 

In addition, the International Monetary Fund (IMF) and World Bank spring meetings officially commence in Washington.

Elsewhere, euro zone February industrial production is anticipated. 

JPMorgan Chase, Infosys, PNC Financial Services, Toho and Wells Fargo are among stocks scheduled to report earnings.

HSBC is expected to provide a trading update.

In overnight corporate news, Amazon and Microsoft were named by US Defense as the remaining contenders to supply cloud services under a contract estimated to be worth up to $US10B.

This dulled perceived Oracle and IBM prospects.

Grains trader Archer Daniels Midland revealed redundancies were likely before mid-year, due to ongoing restructuring.

Costco reported 20.6% March growth in comparable online sales. 

Walt Disney streaming plans, detailed during an investor day post-US settlement, are expected to influence some trade tonight.
12/04/2019 8:00:00 AM

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