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Market Opener – 16 Jul 2018

 
Local Markets Commentary
The Australian market commences a new week’s trade following decidedly mixed overnight Friday commodities trade leads, amid continuing international political flux, and ahead of a swag of tier one economic indicators out of China. 

China’s June quarter GDP growth is expected midday AEST.

June fixed asset investment, industrial production and retail sales are also due then.

Post-ASX trade Friday, China reported a 12.7% rise in June lending to 1840B yuan.

In overnight Friday commodities trade, WTI crude swung higher and Brent continued to rally. 

US gold futures turned lower.

Iron ore (China port, 62% Fe) slipped marginally.

LME copper settled slightly higher. Nickel fell. Aluminium continued its latest decline.

The $A turned higher, surpassing US74.20c after falling to US73.75c early Friday evening.

Today’s moves will likely mostly prove in response to China’s data deluge.

Locally today, a weekly capital city residential property price report is due pre-trade. 

Elsewhere later today, the presidents of the US and Russia are due to meet in Finland. Any particularly adverse commentary could influence international markets sentiment tonight.

Japan’s markets will remain closed today due to a public holiday.

Overseas Market Commentary
Major European and US equities markets ultimately settled higher overnight Friday, following varying degrees of vacillation. 

Three major US financial stocks reported for the quarter and US data updates proved lacklustre.

In addition, US relationships with European Union allies remained in focus amid a plethora of commentary and analysis, and ahead of a northern European meeting later today between the presidents of Russia and the US.

Further, a batch of influential data out of China today, remained under consideration, amid expectations of plenty of interpretation and speculation from during ASX trade today.

In the meantime, an ongoing US investigation announced hacking charges against a dozen Russian intelligence personnel in relation to the 2016 US presidential election.

In new data releases, US June import prices fell 0.4% for the month following a 0.6% rise in May.

Export prices rose 0.3% against 0.6%. 

An initial July University of Michigan consumer sentiment reading fell to 97.1 from 99.3, the conditions component dropping four points to 113.9.

Tonight in the US, June retail sales, May business inventories and a New York region business activity index are due.

Later today, the International Monetary Fund (IMF) publishes an updated world economic outlook.

Companies scheduled to report earnings or provide trading updates include Bank of America, BlackRock, Netflix and France’s Total.

In overnight Friday corporate news, JPMorgan Chase unveiled an 18% net profit increase, to $US8.32B, exceeding expectations, but was pushed lower.

Citigroup reported ~15% higher quarterly net income of $US4.49B, supported by institutional business, but the stock fell 2%.

Wells Fargo revealed drops for both revenue and profit and pulled back 0.9%.

Over the weekend, the US administration was reported to have agreed an initial ~$US13B purchase of F-35 Jets from Lockheed Martin, but at an ~6% discount to prices discussed in February 2017.

Some cited NATO’s proposed boost to defence spending as part of the reason Lockheed settled ~6% higher for the week, and one key partner, Northrop Grumman, ~4.5%.
 
Posted on 16/07/2018 8:06:00 AM

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