RunningMoney

The ASX 200 is up 24 points in mid morning trade after strong overnight leads. It best with APT board/gmm ∆, telcos worst after SDA ↓date. Materials good and banks mixed. RBA yes or no? (Odds are $2.80 for no change) #ausbiz

TODAY

• RBA meeting – markets seeing about an 80% chance of a rate cut.
• Speech by RBA Governor Philip Lowe at the RBA Board Dinner with the business community in Darwin tonight.

OVERNIGHT

SPI FUTURES +19

US EQUITIES – S&P 500 +23 (+0.77%), Dow +117 (+0.44%), NASDAQ +85 (+1.06%).

Main themes – Market closed at new record

• Trade truce – The US and China agreed to resume talks and not to impose new tariffs. The US said they would hold off on the potential 25% tariffs on the remaining $300 billion of imports from China and China said they would continue to buy US agricultural products. $250bn in existing tariffs remain in place at 25%; US to relax restrictions on U.S. companies doing business with Huawei
• OPEC and allies agree to extend oil output reductions until end of this year
• Disappointing PMI numbers across Europe and China with many readings below 50

EUROPEAN MARKETS – Stronger. STOXX600 +0.78%, UK FTSE +0.97%, German DAX +0.99%, French CAC +0.52%

CURRENCIES

• The USD is significantly stronger at 96.82.
• The Aussie dollar is lower at US69.61.

BONDS – Sold off as investors switched to risk assets. 2-yr: +5 bps to 1.79%, 3-yr: +5 bps to 1.74%, 5-yr: +4 bps to 1.80%, 10-yr: +4 bps to 2.04%, 30-yr: +4 bps to 2.57%

COMMODITIES

• Oil – WTI futures rose US96c or 1.1% to US$59.09 (earlier hit US$60)as the OPEC meeting continues. Markets expect OPEC+ to exten the current production cuts by a further 9 months. US-China trade truce an news on Iran also supportive of prices.
• Gold fell 1.8% to $1,378.40 an ounce on the US/China truce
• Iron Ore – Commsec has iron ore up 3.2% to US$121.20 a tonne, a record high.
• LME metals – Mostly lower. Cu -0.99%, Ni -2.76%, Al -0.17%

ECONOMIC DATA, NEWS & POLITICS

• US economic data – ISM Manufacturing Index for June 51.7 (consensus 51.5, Prior 52.1); Construction Spending for May -0.8% (consensus 0.0%; Prior revised to +0.4% from 0.0%)
• North Korea – US and North Korea agreed to restart nuclear agreement negotiations after President Trump became first sitting U.S. president to enter North Korea
• Iran nuclear breach – Confirmation Iran breached the limit (of 300kg) of its enriched uranium stockpile set in 2015,
• Economic data – June manufacturing PMI readings for China, Japan, the eurozone, German, Italy, Spain, and the UK were all below 50.0, which is the dividing line between expansion and contraction.
• Chinese Official manufacturing PMI 49.4 (previous 49.4, consensus 49.5), Official services PMI 54.2 (previous 54.3, expected 54.5), Caixin PMI 49.4 (previous 50.2, expected 50.0)
• Europe PMI 47.6 (previous 47.7, exp 47.8). At a country level, German activity slowed for the sixth month in a row, Italy for its ninth consecutive month, and Spain shrinking at its fastest rate in six years. The UK June manufacturing PMI reading fell to its lowest since October 2012.