Local Markets Commentary

The Australian market commences today’s trade on negative US equities and a substantial gold price drop.

In other overnight commodities trade, WTI crude settled modestly lower. Copper fell further. Iron ore continued slightly lower.

The $A swung decidedly lower after trading at ~US76.70c yesterday evening.

Locally pre-trade, AiG releases a national September services sector activity index.

11.30am AEDST, the ABS publishes August retail trade. September vehicle sales are due midday.

In Japan, a services PMI is expected anytime from 11.30am.

China’s markets remain closed for the week.

Overseas Market Commentary

Major European and US equities markets diverged markedly overnight, US sentiment vacillating sufficiently to produce further falls.

The British pound continued to drop, on warnings from the UK PM and Chancellor of a likely bumpy process for European Union separation negotiations. The pound began its descent on the weekend announcement that the UK would commence a formal exit process by the end of March 2017.

Reports emerged that the European Central Bank (ECB) could curtail its assets purchases program earlier than at the initially proposed March 2017. .

Gold slid, in part on a comparative robust $US, dragging commodities prices lower.

Meanwhile in data releases, a 52.3 UK construction sector PMI meant the sector had returned to expansion mode for the first time since May. In addition to the lower pound, this bolstered equities sentiment.

Euro zone August producer prices came in as anticipated, another 2.1% lower following a 2.6% drop in July.

In the US, the ISM’s New York business activity index was reported 2.1 points higher, at a still contraction-mode 49.6. The employment component plunged 21 points to 33.9.

As pre-empted last week the International Monetary Fund’s (IMF) World Economic Outlook contained varied growth forecast revisions.

The UK’s 2016 GDP prediction was raised to 1.8% but the 2017 forecast lowered to 1.1%.

The IMF expects 1.6% 2016 growth in the US, down from 2.2%.

Tonight in the US, ISM’s September services sector activity index, a private sector jobs report, August factory orders, final August durable goods orders, August trade balance, Markit final September PMIs and weekly mortgage applications are due.

Monsanto and Tesco (UK supermarket chain) re among companies due to report.