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Market Opener – 08 Jan 2019

 
Local Markets Commentary
The Australian market commences today’s trade ahead of influential domestic data, and with US-China trade talks scheduled to continue today in Beijing, following optimistic comments from the US administration overnight.

Yesterday evening, China’s December foreign reserves were reported at $US3.07 trillion, following $US3.06 trillion for November.

In overnight commodities trade, oil continued in rally mode.

US (February) gold futures turned higher. 

Iron ore (China port 62% Fe fines) extended recent gains.

LME copper settled almost flat. Aluminium and nickel continued higher. 

The $A has remained buoyant after trading at ~US71.40c early yesterday evening.

Locally today, the Australian Bureau of Statistics is due to report December trade figures 11.30am AEDT.

ANZ is also expected to publish a December job advertisements at 11.30am.

A weekly consumer sentiment report is due pre-trade.

The Reserve Bank of Australia (RBA) will release official reserve assets post-trade.

Overseas Market Commentary
Major European and US equities markets headed lower in early overnight trade.

US indices recovered to post a second consecutive session of positive settlements, in part supported by positive US Secretary of State comments regarding yesterday’s renewed face-to-face trade talks with China, coupled with a third batch of US soy bean purchases from China since 1 December.

The $US headed lower, notably falling 0.7% against both the euro and Swiss franc, as commentary further supported expectations of a slowdown in US rate rises this year.

The Atlanta Federal Reserve president supported this view, opting for one likely rise during 2019.

In addition, a batch of key statistics on both sides of the Atlantic came in mixed.

Meanwhile, the World Bank president resigned, effective 1 February, in favour of promoting infrastructure investment for struggling countries.

Among overnight data releases ISM’s US December services sector activity index dropped 3.1 points to a nonetheless robust 57.6.

However, due to the services sector weighting in GDP calculations, this lowered expectations for US December quarter GDP growth.

Final November factory orders were not reported, due to the partial US government services shutdown.

The US president was reported meanwhile to want to bolster his position on securing new government funding legislation by hosting a televised national address from the Mexico border wall site.

In earlier overnight data releases, euro zone November retail sales were estimated to have grown by 0.6% for the month, the same as the revised October increase. Year-on-year, sales were up 1.1%.

A regional Sentix economic sentiment index dropped to -1.5 from -0.3, although forecasters had anticipated -2.8.

Germany’s November factory orders fell 1% after a 0.2% October rise.

November retail sales rose 1.4% for the month and 1.1% year-on-year, following respective 0.1% and 5.2% October gains. 

A December construction PMI rose two points to 53.3. 

In the UK, year-on-year new car sales tumbled 5.5% during December following a 3% November drop. 

Tonight in the US, November trade statistics are due, but might not be released due to the US government services partial shutdown.

A November job openings report and small business optimism index are also due.

In addition, the European Union (EU) and US are scheduled to resume trade talks in Washington tonight.

Overnight, the EU revealed its imports of US soya beans had jumped to 75% of the regional market, and could growth further.

UK supermarket chain WM Morrison (Morrison’s) is due to provide a trading update.

In overnight corporate news, Eli Lilly revealed plans to outlay $US8B cash for Loxo Oncology.

General Electric appreciated 6% on speculation regarding a potential $US40B offer for GE’s aircraft leasing business.

Tesla officially launched the construction of its first manufacturing facility in China.

Amazon benefited ~3% from a positive research report.
 
Posted on 8/01/2019 7:00:00 AM

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