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Market Opener – 04 Jan 2019
Local Markets Commentary
The Australian market commences Friday trade following overnight falls across major international equities markets and ahead of key data today for China and Japan, and tonight out of the US.
In overnight commodities trade, oil continued to strengthen.
US (February) gold futures rallied.
Iron ore (China port 62% Fe) was again reported higher.
LME copper continued to drop. Aluminium swung higher. Nickel settled flat.
The $A appreciated to ~US70.00c after trading at ~US69.65c early yesterday evening.
Locally today, a monthly inflation gauge report has been rescheduled and is expected by some late-morning.
Regionally, Caixin is due to release a December services PMI for China, 12.45pm AEDT.
A manufacturing PMI is expected out of Japan 11.30am AEDT.
Overseas Market Commentary
Major European and US equities markets fell early overnight on soured tech sector sentiment, some discouraging data and heightened geopolitical tensions.
The FTSE 100 notably was the only major index to indicate a potential ultimate recovery intra-session.
In the US, the yield for two-year Treasury notes fell intra-session below the Federal Reserve’s 2.4% effective rate.
Also overnight, US House of Representatives control switched to the Democrats, as a result of the November 2018 mid-term election, early House utterances signalling of no simple short-term solution to ending the almost two-week long funding dispute-spawned partial US government services shutdown.
In addition, travel and nuclear activity warnings indicated increased tensions between the US and China and Iran.
Among a mixed batch of new US data releases, ISM’s keenly-watched manufacturing index dropped 5.2 points to a nonetheless relatively strong 54.1.
The new orders component slid 11 points, however, to 51.1.
A private sector employment report calculated 271,000 new jobs during December following a 157,000 estimate for November.
Weekly new unemployment claims rose by 10,000 to 231,000, following forecasts of a 1000 fall.
A December job cuts report in the meantime estimated 43,884 planned layoffs against November’s 53,073.
Weekly mortgage applications plunged 8.5% after dropping 5.8% the previous week.
Across the Atlantic, a UK December construction PMI came in at 52.8, from 53.4 in November.
Tonight in the US, there is again plenty to potentially influence trading sentiment.
US Federal Reserve chair Jerome Powell speaks publicly in a joint event with immediate former Fed chairs Yellen and Bernanke.
In addition, the traditionally influential monthly national employment statistics are due.
Through tonight and tomorrow (US time), four regional Fed presidents Fed are scheduled to speak publicly.
In overnight corporate news, Apple’s share prices dropped on both sides of the Atlantic after the company issued a sales warning post-Wednesday US trade (yesterday morning AEDT), in part due to trade tensions between the US and China.
In association, Apple component suppliers and luxury consumer item manufacturers suffered.
Post-US trade this morning, most major vehicle manufacturers reported declines in December and/or December quarter sales.
Meanwhile, US pharmaceuticals manufacturer Bristol-Myers Squibb revealed a planned $US74B acquisition of biotech company Celgene.
UK apparel retailer Next appreciated early on a better-than-anticipated festive season sales report.
The Australian market commences Friday trade following overnight falls across major international equities markets and ahead of key data today for China and Japan, and tonight out of the US.
In overnight commodities trade, oil continued to strengthen.
US (February) gold futures rallied.
Iron ore (China port 62% Fe) was again reported higher.
LME copper continued to drop. Aluminium swung higher. Nickel settled flat.
The $A appreciated to ~US70.00c after trading at ~US69.65c early yesterday evening.
Locally today, a monthly inflation gauge report has been rescheduled and is expected by some late-morning.
Regionally, Caixin is due to release a December services PMI for China, 12.45pm AEDT.
A manufacturing PMI is expected out of Japan 11.30am AEDT.
Overseas Market Commentary
Major European and US equities markets fell early overnight on soured tech sector sentiment, some discouraging data and heightened geopolitical tensions.
The FTSE 100 notably was the only major index to indicate a potential ultimate recovery intra-session.
In the US, the yield for two-year Treasury notes fell intra-session below the Federal Reserve’s 2.4% effective rate.
Also overnight, US House of Representatives control switched to the Democrats, as a result of the November 2018 mid-term election, early House utterances signalling of no simple short-term solution to ending the almost two-week long funding dispute-spawned partial US government services shutdown.
In addition, travel and nuclear activity warnings indicated increased tensions between the US and China and Iran.
Among a mixed batch of new US data releases, ISM’s keenly-watched manufacturing index dropped 5.2 points to a nonetheless relatively strong 54.1.
The new orders component slid 11 points, however, to 51.1.
A private sector employment report calculated 271,000 new jobs during December following a 157,000 estimate for November.
Weekly new unemployment claims rose by 10,000 to 231,000, following forecasts of a 1000 fall.
A December job cuts report in the meantime estimated 43,884 planned layoffs against November’s 53,073.
Weekly mortgage applications plunged 8.5% after dropping 5.8% the previous week.
Across the Atlantic, a UK December construction PMI came in at 52.8, from 53.4 in November.
Tonight in the US, there is again plenty to potentially influence trading sentiment.
US Federal Reserve chair Jerome Powell speaks publicly in a joint event with immediate former Fed chairs Yellen and Bernanke.
In addition, the traditionally influential monthly national employment statistics are due.
Through tonight and tomorrow (US time), four regional Fed presidents Fed are scheduled to speak publicly.
In overnight corporate news, Apple’s share prices dropped on both sides of the Atlantic after the company issued a sales warning post-Wednesday US trade (yesterday morning AEDT), in part due to trade tensions between the US and China.
In association, Apple component suppliers and luxury consumer item manufacturers suffered.
Post-US trade this morning, most major vehicle manufacturers reported declines in December and/or December quarter sales.
Meanwhile, US pharmaceuticals manufacturer Bristol-Myers Squibb revealed a planned $US74B acquisition of biotech company Celgene.
UK apparel retailer Next appreciated early on a better-than-anticipated festive season sales report.