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Market Opener – 24 May 2019

 
Local Markets Commentary
The Australian market commences Friday trade following overnight falls across international equities markets, with a CPI update from Japan in hand, and ahead of Monday public holiday weekends in the US and UK.

In overnight commodities trade oil slid.

US gold futures (June) rallied.

LME copper turned slightly higher. Aluminium swung to rally mode.

The $A approached US69.00c after trading at ~US68.75c early yesterday evening. 

Regionally this morning, Japan has published 0.1% April CPI growth for the month, and 0.9% year-on-year. 

In addition, New Zealand has reported a $NZ443M April trade surplus, following $NZ922M at the end of March.

Overseas Market Commentary
Major European and US equities markets fell on opening overnight, amid fears for international economic growth prospects and as a batch of data releases disappointed.

In the US, public servants revealed the US administration was preparing to offer $US16B worth of support to agribusinesses impacted by the adverse impacts from China trade negotiations.

European Central Bank (ECB) April policy meeting minutes revealed residual hope for demonstrable regional economic growth during the second half of 2019, but also that policy committee members were prepared to admit the odds had fallen.

In the UK, the PM put off revealing another proposal to govern arrangements for the UK’s withdrawal from the European Union (EU), indicating a further alteration in an attempt to garner support.

Meanwhile, some MPs were reportedly considering party regulatory change in order to force the PM’s resignation.

The British pound in the meantime traded ~3% lower than at the end of April, and was expected to fall below $US1.260.

Among overnight data releases, initial May euro zone PMIs came in at 47.7 for manufacturing and 53.5 for the services sector, against 47.9 and 52.8 respectively in April.

In Germany, a final March quarter GDP reading confirmed growth at 0.4% for the three months and 0.7% year-on-year. 

The IFO business climate index slipped 1.3 to 97.9.

May PMIs were initially estimated at a decidedly contractionary 44.3 for the manufacturing sector and healthy 55.0 for services, following 44.4 and 55.7 respectively for April.

In the US, April new home sales pulled back, dropping 6.9% following three consecutive months of higher sales, including an 8.1% March jump. Year-on-year, April sales were 7.0% higher.

Markit preliminary May PMIs came in at 50.6, down two points, for the manufacturing sector, and 50.9, down 2.1 for services, the greater component of GDP calculations.

The Kansas City Fed manufacturing index plummeted to two from 12. 

Weekly new unemployment claims fell by 1000.

Tonight in the US, April durable goods orders are due.

Elsewhere, European Parliament elections continue. Voting commenced overnight and will continue through Sunday.

NB: US and UK markets (including the LME) will be closed Monday due to public holidays.
 
Posted on 24/05/2019 8:00:00 AM

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