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Market Opener – 20 Sep 2019

 
Local Markets Commentary
The Australian market opens Friday trade with relatively sparse new overnight developments, apart from a third US Federal Reserve overnight release for the week of ~$US75B worth of short-term funding.

In addition, locally today, no major economic reports are scheduled for release.

Regionally, Japan was expected to report August CPI growth 9.30am AEST.

In overnight commodities trade, oil prices diverged, WTI crude settling essentially flat, but Brent continuing to gain.

US gold futures (December) swung lower.

Iron ore (Nymex CFR China, 62% Fe) declined further, below $US93.50/t.

LME copper slightly extended this week’s falls. Nickel continued higher.

The $A appreciated to ~US67.95, and held, after tumbling to US67.85c early yesterday evening.

Overseas Market Commentary
Major European and US equities markets trade sentiment diverged overnight, European indices closing near session peaks and key US indices near session lows.

Monetary policy and geopolitics remained in the limelight, but there were no new definitive developments.

The US Federal Reserve however, notably made available another $US75B worth of short-term funding, against indicated demand for ~$US84B.

The Bank of England retained status quo rates and overall policy in a unanimous monetary policy committee decision.

The bank’s economists dropped the predicted 0.3% September quarter GDP growth prediction to 0.2%, however.

The delays in determining a clean UK separation from the European Union had produced volatile economic data, the bank warned, suggesting forecasting was becoming more difficult.

Earlier, the Bank of Japan had decided also to make no change to rates or general policy, but indicated a close review next month would be needed due to fluid international policy and trade scenarios.

China and the US ‘deputy-level’ trade talks commenced in Washington, with reports that a group from China would visit US agribusinesses next week. The official Washington talks, involving a reported 30-strong China delegation, are due to end tonight, ahead of top-level talks set for early October.

In the UK, the PM’s office confirmed the European Commission president Jean Claude Juncker’s shared optimism that the European Union (EU) and UK could agree on a set of arrangements for managing the UK’s departure from the EU, set for 31 October.

Overnight data releases included UK August retail sales, which fell 0.2% for the month, but which were 2.7% higher than for August 2018. Sales had risen 0.4% during July.

In the US, the Philadelphia Fed manufacturing index fell to 12 from 16.8.

August existing home sales rose by 1.3% following a 2.5% July climb.

Weekly new unemployment claims rose by 2000 following forecasts of an up to 7000 end-of-summer increase.

The Conference Board’s leading index came in flat after rising by 0.4% in July.

Tonight in the US, two US Federal Reserve officials are scheduled to speak, but no major economic data reports are due.

Elsewhere, the Bank of England publishes a quarterly bulletin.
 
Posted on 20/09/2019 8:00:00 AM

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