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Market Opener – 12 Sep 2019

Local Markets Commentary
The Australian market commences today’s trade ahead of a European Central Bank policy meeting tonight, the last for president Mario Draghi, plus a ‘goodwill gesture’ to China from the US president, and a CPI reading for the US tonight.

The US president has this morning announced he will push back to 15 October new import taxes on some goods from China.

Post-yesterday’s ASX close, China reported a 6.9% fall in August with vehicle sales, and 1210B yuan worth of new lending for the month, against 1060B yuan in July.

Locally today, stocks trading ex-dividend include BRG, FLT, IFL, IGO, MND, S32 and WSA. Please see p3 for a detailed list.

In overnight commodities trade, oil dropped. 

US gold futures (December) turned to settle modestly higher.

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

LME copper and nickel continued lower. Aluminium turned so.

The $A again remained within a relatively narrow range after trading at ~US68.65c early yesterday evening, but is appreciating this morning.

China’s markets will be closed due to an Autumn festival holiday tomorrow.

Japan's markets are scheduled to be closed Monday, also due to a public holiday.

Overseas Market Commentary
Overnight trade across major European and US equities markets demonstrated improved risk sentiment from opening.

Yesterday, China announced it would not apply new import taxes to a select range of US goods, viewed variously as a negotiating move and a concession.

Meanwhile, the US president promoted negative interest rates while continuing to complain about the Federal Reserve. 

In the UK, Scotland’s Court of Session (its highest court of appeal) ruled the suspension of parliament until 14 October was unlawful and that it ought be annulled.

The PM’s office said the decision would be appealed in the UK Supreme Court, which will hear an appeal of a High Court challenge rejection of a separate challenge Monday 17 September.

Another challenge was lodged in Belfast’s High Court, from which a ruling is anticipated Thursday next week, 20 September.

Among overnight US data releases, August producer prices rose 0.1% for the month, following a 0.2% July increase. Year-on-year, prices were 1.8% higher.

July wholesale inventories grew 0.2%, against a 0.1% June decline.

Weekly new mortgage applications rose by 2%, as 30-year rates declined to 3.82% from 3.97%.

Earlier China reported August new lending had tallied 1210B yuan, against 1060B for July.

In addition, vehicle sales were estimated to have dropped by 6.9% year-on-year, following a 4.3% July fall.

Tonight in the US, an August CPI growth estimate and budget statement are due, together with weekly new unemployment claims. 

Elsewhere, the European Central Bank convenes its last policy meeting under president Mario Draghi.

Mr Draghi’s post-meeting press conference is hence more keenly anticipated than usual.

A final August CPI reading for Germany and July industrial production for the euro zone are also due tonight.

Also tonight, Adobe Systems, Broadcom Inc, Kroger, UK supermarket chain Morrisons and Oracle Corp are scheduled to report earnings.
Posted on 12/09/2019 8:00:00 AM

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