The ASX 200 is down 34 points in mid-morning trade, with US markets closed. Broad-based with Materials and Financials worst sectors. Staples and defensives ok. Retails sales beats @+0.3% but SEPT revised ↓, OPEC tonight along with Fed Powell, #ausbiz
- Economic data – Balance of Trade, Imports/Exports, Retail Sales
- RBA Deputy Governor Debelle speaking
- Ex-dividend – Collins Foods (GKF) 9.0c, Pendal Group (PDL) 30.0c, Webster (WBA) 3.0c
- US economic data – ADP Employment Change, Productivity-Rev., Unit Labor Costs – Rev, ISM Services, Beige Book, Trade Balance, Factory Orders
- Fed Speak – New York Fed President John Williams (FOMC voter). Fed chair, Jerome Powell, will give testimony of the economic outlook before the congressional Joint Economic Committee.
- OPEC Meeting Tonight – Overnight OPEC+ (OPEC members and Russia etc) met and recommended a production cut but no details on the size was indicated. Gets underway tonight, with talk of 1.3mbpd. WTI crude futures have plunged 31% since October 3, leading to ample speculation that a production cut will be agreed to at this meeting in an effort to curtail excess supply. President Trump has been vocal in his criticism of any efforts OPEC might make to drive up oil prices. It is therefore interesting that OPEC+ has ignored that criticism and run the risk of a diplomatic and/or economic reprisal from the president. Important not just for direct earnings for the energy sector and indirectly for transport companies, but they flow through petrol prices, which can either help or hurt consumers’ discretionary spending potential. Oil prices are also significant in terms of inflation forecasts, which will flow through to monetary policy considerations for central banks.
- Magellan Financial Group (MFG) – FUM
- Bank of Queensland (BOQ) – Brendan White, Group Executive BOQ Business, is leaving to become CEO of Cash Converters (CCV).
SPI FUTURES +13
US EQUITIES – Closed for George HG Bush’s memorial service
- Equity and treasury markets closed for a National Day of Mourning
- Energy and metals futures are open for their normal hours. Trump tweeted “Hopefully OPEC will be keeping oil flows as is, not restricted. The World does not want to see, or need, higher oil prices!”
EUROPEAN MARKETS – All lower. STOXX500 -1.16%, UK FTSE -1.44%, German DAX -1.19%, French CAC -1.36%.
- The USD is little changed at 96.99.
- The Aussie dollar is a lot weaker at US72.68c.
- WTI crude futures were down 36c at US$52.89, ahead of this week’s meeting between OPEC and non-OPEC producers. Expectations are for a deal to cut production by 1.3mbpd). Reports Saudi Arabia produced a record 11.3mbpd in November (up from 10.65mbpd in October). If confirmed, it would be the second-largest monthly increase since Reuters records began in 1997. US API inventories rose for the 11th consecutive month, up 5.4mb. Within OPEC, Qatar said on Monday it would leave the producer club in January.
- Iron Ore – IRESS reports iron ore was up US$2.00 at US$67.00 a tonne. The CommSec site says China Import (Fines 62% Fe) was down US5c at US$67.55 dry ton. (CFR Tianjin port)
- LME metals – Mixed. Cu -0.55%, Ni +0.67%, Al -0.25%
ECONOMIC DATA, NEWS & POLITICS
- European data – Retail sales were stronger-than-anticipated in October, up 0.3%, but the previous monthly was revised down to -0.5% form flat, giving a weaker 1.7% yoy number. The UK Services PMI number of 50.4 (down from 52.2) was quite disappointing.