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Market Opener – 10 Sep 2019

Local Markets Commentary
The Australian market commences today’s trade with new data due out of China late morning, together with a well-followed national domestic business survey report. Several large-cap domestic stocks are also trading ex-dividend. 

Elsewhere, the UK House of Commons was this morning (AEST) expected to vote against a 15 October general election. Parliament will then be suspended until 14 October.

Regionally today, China’s August CPI growth and producer prices are anticipated 11.30am AEST.

Locally, NAB’s monthly business survey report, highlighting conditions and sentiment, is due at the same time.

Pre-trade, a weekly consumer confidence reading is due. 

Stocks trading ex-dividend today include AMC, CSL, NWS and SHL. Please see p4 for a detailed list.

In overnight commodities trade, oil extended Friday’s gains. 

US gold futures (December) continued lower.

Iron ore (Nymex CFR China, 62% Fe) swung higher to trade above $US91.20/t.

LME copper settled slightly lower. Nickel continued to rally. Aluminium swung to record a new rise.

The $A was pushed back a little after trading at ~US68.70c early yesterday evening.

Overseas Market Commentary
Choppy trade featured across most major European and US equities markets overnight, but the UK’s FTSE generally maintained a downward trend.

Investors were faced with some key data and plenty of geopolitics to consider.

In the UK, a bill approved by both houses of parliament last week became law following approval from Queen Elizabeth.

The law requires the PM to request from the European Union (EU) a delay to UK-EU separation plans should there be no arrangements agreed by both the UK parliament and EU by 19 October.

It also allows for a no-deal separation should parliament approve this by 19 October.

The PM maintains he has a chance of achieving a satisfactory agreement with the EU by the 17 – 18 October EU summit.

He again declared overnight that he would not ask for a delay.

Friday, a legal bid against the planned five-week parliamentary suspension was rejected. A decision appeal is anticipated to be heard 17 September, but parliament was due to be suspended from the conclusion of last night’s sitting.

Overnight, the House of Commons voted (311-to-302) for the release of government documents regarding a no-deal separation and also associated with the suspended parliament decision.

A new vote on an early election (15 October nominated), promoted by the PM, was anticipated this morning (AEST).

In developments elsewhere, North Korea suggested meeting again with the US regarding denuclearisation later this month.

A US military official in the meantime asserted the US would respond to any increase in Taliban attacks in Afghanistan.

In overnight data releases, Germany’s July trade figures cheered, the trade surplus jumping to €21.4B from €16.8B.

Exports rose 0.7% for the month, seasonally adjusted, against expectations of a 0.5% decline and following a 0.1% June pullback. 

Imports fell 1.5% after rising 0.7% in June.

The UK however, reported a £0.219B July trade deficit following a £0.132B deficit at the end of June.

Further, July industrial production dropped 0.9% year-on-year following a 0.6% June fall. For the month, industrial output increased 0.1% following a 0.1% June slip.

Manufacturing production fell 0.6% year-on-year, following a 1.4% June drop. For the month, manufacturing output improved 0.3% after a 0.2% June pull back.

Construction output improved 0.3% year-on-year after declining by 0.2% in June.

July GDP grew 0.3% for the month following a flat result for June. The GDP growth average for the three months to the end of July came in flat, following a mean 0.2% decline for the three months to 30 June.

In the US, July consumer credit was estimated to have jumped by a 20-month high of $US23.3B following a $US13.8B June rise. 

Tonight in the US, an August job openings report and small business optimism index are due.

Among scheduled corporate events, Apple’s product suite update is keenly anticipated 1pm (US) ET.
Posted on 10/09/2019 8:00:00 AM

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