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Market Opener – 17 Jul 2018

 
Local Markets Commentary
The Australian market opens today’s trade on scant overnight international trade support, ahead of confirmation of Reserve Bank of Australia (RBA) policy and new June data out of China. 

In overnight commodities trade, oil swung sharply lower. 

US gold futures settled flat.

Iron ore (China port, 62% Fe) headed higher.

LME copper and nickel were pushed lower, but aluminium bounced.

The $A slipped to ~US74.20c after rising to US74.35c early yesterday evening.

Locally today, the RBA publishes the minutes of its 3 July policy meeting 11.30am AEST.

A weekly consumer sentiment reading is due pre-trade. 

Regionally, China’s June capital city residential property prices are expected 11.30am AEST.

This morning, New Zealand has reported 0.4% June quarter CPI growth, and 1.5% on an annual basis.

Overseas Market Commentary
Choppy, swinging trade featured across most major European and US equities markets overnight, in the early stages of a new reporting season, amid falling oil prices, and while investors waited for any definitive statements out of international leader summits plus a key parliamentary vote in the UK. 

The US and Russian presidents were meeting in Helsinki, the US president initially bemoaning his own nation’s previous relationships with Russia, but later also implicating Russia. In addition, the US president contradicted the findings of US investigators who have claimed Russian interference in the 2016 US presidential election.

Earlier, the heads of the European Union (EU) and European Commission (EC) met with China’s premier Li Keqiang in Beijing, each promising to support free trade, but EC president Jean-Claude Juncker also appearing to suggest China could enable greater access. 

In the euro zone, the May trade surplus came in at €16.5B, following €16.7B in April and expectations of a substantial increase to €23.6B.

US June retail sales were reported 0.5% higher for the month. In addition, May sales were revised to a 1.3% gain, from the initially estimated 0.8% improvement.

A New York region business activity index fell 2.4 points to 22.6, nonetheless exceeding forecasts and remaining solidly within growth territory (above 0). 

In the meantime, the International Monetary Fund (IMF) left global, US and China growth 2018 and 2019 forecasts untouched as it released a world economic outlook update. The IMF warned trade negotiations needed to managed prudently.

Tonight in the US, Federal Reserve chair Jerome Powell speaks to the Fed’s policy and outlook report while meeting with a Senate banking committee. 

Among data releases, June US industrial production and a home builders’ market report are due.

Across the Atlantic, Bank of England governor Mark Carney is scheduled to again speak publicly on financial stability.

Companies due to report earnings later today and tonight include CSX, Goldman Sachs, Johnson & Johnson and UnitedHealth.

In overnight corporate news, Deutsche Bank pre-empted its scheduled 25 July report with a positive profit outlook, this pushing the stock 8% higher.

Earlier, Bank of America appreciated almost 4.5% after quarterly results exceeded industry expectations.

BlackRock suffered an ~1.5% fall from reporting reduced incoming cash, totalling $US20B. Earnings came in better-than-anticipated, however. 

Among Farnborough Airshow announcements, Boeing revealed a $US4.7B order from DHL for freight craft and subsequently rose ~1.5%.

Netflix quarterly subscriber numbers undershot the company’s target by ~one million, but this was reported post-US trade, so the stock posted a gain before being punished post-settlement. Some expect the result to impact general tech sentiment tonight, even though Netflix earnings surpassed expectations.

Meanwhile, Amazon commenced its annual sales event known as Prime Day, this time promising 36 hours of bargains, through to 3am ET Wednesday.
 
Posted on 17/07/2018 8:10:00 AM

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