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Market Opener – 06 Sep 2019

Local Markets Commentary
The Australian market opens Friday trade ahead of influential data out of China over the weekend, amid increased Middle East tensions, and with the S&P/ASX indices September quarter rebalance in hand.

Locally today, AiG releases its August construction sector activity index pre-trade.

Ex-dividend season also continues today. Please see p4 for a list of companies trading ex-dividend.

In overnight commodities trade, oil settled with relatively minor gains. 

US gold futures (December) dropped.

Iron ore (Nymex CFR China, 62% Fe) seesawed lower.

LME copper and aluminium extended Wednesday’s rally. Nickel tumbled.

The $A effectively trod water after trading beyond US68.15c early yesterday evening.

Over the weekend, China is expected to publish August trade statistics.

Overseas Market Commentary
Renewed risk sentiment remained with most major European and US equities markets overnight, the FTSE proving the exception.

Late-morning (AEST) yesterday, news reports suggested face-to-face high-level China-US trade talks would recommence next month. China subsequently confirmed the planned talks.

In the UK, UK-EU separation and UK potential election uncertainty continued.

The House of Commons voted earlier this week to request that the PM seek European Union approval to push back any UK-EU separation, to enable terms to be approved by the UK parliament. 

Some anticipate the House of Lords may achieve a vote on this tonight.

Parliament is due to return to recess from 10 September (Tuesday this coming week) until 14 October.

New data releases included Germany’s July factory orders, which dropped 2.7% following a 2.7% June rise.

The disconcerting news continued, the nation’s August construction PMI estimated at 46.3 from 49.5 in July. 

In the US, ISM’s August non-manufacturing index pleased, rising to a robust 56.4 from 53.7. The services sector is estimated to account for ~67% of US GDP growth.

A final Markit services PMI represented a 2.3-point fall to 50.7, however.

July factory orders rose 1.4% for the month, following a 0.5% June increase.

Ahead of tonight’s national employment figures, a private sector August jobs report calculated 195,000 new jobs, following 142,000 in July.

A separate August job cuts report estimated 53,480 planned layoffs against 38,845 for July.

In the meantime, weekly new unemployment claims rose by just 1000, to 217,000. 

Tonight in the US, Federal Reserve chair Jerome Powell is scheduled to speak publicly 12.30pm (US ET). National August employment statistics are also due.

Elsewhere, the euro zone’s final June quarter GDP growth reading, and Germany’s July industrial production, are also keenly anticipated.
Posted on 6/09/2019 8:00:00 AM

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