Local Markets Commentary
The Australian market commences today’s trade with further key domestic data due today, following the best spread of overnight commodities price moves for the week to date, and with an Independence Day public holiday celebrated in the US, meaning no regular trade for US equities and commodities markets tonight.
Locally today, the Australian Bureau of Statistics publishes May retail sales 11.30am AEST.
In overnight commodities trade, oil swung higher.
US gold futures (August) continued to rally.
Iron ore (China port, 62% Fe) slipped a few US cents per tonne, remaining above $US123/t.
LME copper, nickel and aluminium each turned to record gains.
The $A continued to appreciate to ~US70.30c after climbing beyond US70.10c early yesterday evening.
Overseas Market Commentary
Major European and US equities markets opened higher overnight, gains mostly never looking seriously threatened (the DJIA the exception), amid mixed data releases and in shortened US trade.
Geopolitical tensions appeared in greater focus again.
Russia in the meantime labelled US sanctions against Iran as ‘unlawful’ and claimed Iran had not caused Persian Gulf instability. Further, Russia’s energy minister declared, ‘We support Iran’.
For his part, the US president renewed a warning to Iran about a likely aggressive response to making threats.
In addition, the UN reported a significant late-Tuesday air strike in Libya’s Tripoli.
Reports also emerged from the US military that China had tested a ballistic missile in the South China Sea from a facility reportedly built by China within a contested islands area.
Among overnight data releases, the euro zone June services sector activity index rose by 0.7 to 53.6.
Germany’s came in at a healthy 55.8, from 55.4 in May.
The UK’s June services PMI was calculated at 50.2 from 51.0.
This pushed the British pound lower, as 75% of UK economic growth is traditionally considered to come from the services sector.
In turn, UK exporters benefited overnight from the softer pound.
Across the Atlantic the (US) ISM’s June non-manufacturing index declined 1.8 points to a nonetheless robust 55.1.
The national May trade deficit grew 8.4% to $US55.5B, a five-month high, and the April deficit was raised from $US50.8B to $US51.2B.
Analysts attributed increased imports, $US266.16B worth in May, following $US257.64B April, to stockpiling ahead of expected new tariffs on goods from China.
May US imports from China rose 12.8% and the trade deficit with China increased 12.2% to $US30.2B.
A private sector employment estimated 102,000 jobs were created during June, following a disappointing revised 41,000 in May, and against expectations of 140,000.
In a separate job cuts report estimated plans to reduce employee numbers by 41,977, against 58,577 in May.
May factory orders were reported 0.7% lower for the month after falling 1.2% in April.
Weekly mortgage applications slipped 0.1% by volume, but were 41% higher than the corresponding week a year ago.
Weekly new unemployment claims fell by 8000 to 221,000.
Tonight, US markets will not trade due to the Independence Day public holiday.
Among companies scheduled to report, Associated British Foods is expected to provide a trading update later today.
In overnight corporate news UK supermarket chain J Sainsbury warned food supplies could be disrupted should the UK separate from the European Union without agreed arrangements in place.
Chip manufacturer Broadcom was reported to be finalising a deal to acquire cybersecurity specialist Symantec which was pushed almost 14% higher.
Tesla benefited more than 4.5% after reporting record June quarter 95,200 vehicle delivery representing a 51% year-on-year increase.
US equities markets will remain closed tonight, due to the Independence Day public holiday.