MID MORNING MARKETS 10-07-19

The ASX 200 is up 41 points in mid-morning trade after a mixed night. Most sectors higher. IT best, Materials worst. WMI cons sentiment. Big night with Powell and FOMC minutes. #ausbiz

m1m2m3TODAY

  • Economic data – Westpac Consumer Confidence Index
  • Japanese data – PPI
  • Chinese data – Inflation Rate, PPI

TONIGHT

  • UK data – Balance of Trade, GDP, Industrial Production, Manufacturing Production, Construction Output
  • US data – Wholesale Inventories
  • Fed Speak – Chairman Jay Powell will speak ahead of semiannual monetary policy testimony to the House Financial Services Committee

COMPANY NEWS

  • Banks – S&P has revised its outlook for the major Australian banks to “stable” from “negative”. This outlook change reflects S&P’s view that the Australian Prudential Regulation Authority (APRA) release on loss absorbing capacity, dated 9 July 2019, indicates that the Australian Government remains highly supportive of Australia’s systemically important banks and that this support is unlikely to diminish in the next two years

OVERNIGHT

m10m11

SPI FUTURES +36

US EQUITIES – S&P500 +4 (+0.12%), Dow Jones -23 (-0.08%), NASDAQ +43 (+0.54%)

Main themes

  • Cautions ahead of Powell’s testimony before Congress.
  • 3M (-2.46%) after an analyst downgrade (RBC Capital Markets) to sector perform from outperform on worries over the macro economic environment and overhang from litigation.

EUROPEAN MARKETS – Mostly lower. STOXX600 -0.51%, UK FTSE -0.17%, German DAX -0.85%, French CAC -0.31%, Deutsche bank (-4.2%) after falling 5.4% yesterday. German chemical giant BASF (-3.32%) cut its outlook for Q2 and FY19. Danske Bank lowered its outlook for the year due to pressure on margins.

CURRENCIES

  • The USD is stronger at 97.50.
  • The Aussie dollar is lower at US69.30.

BONDS – -yr: -1 bp to 1.88%, 3-yr: +1 bp to 1.84%, 5-yr: +2 bps to 1.86%, 10-yr: +3 bps to 2.06%, 30-yr: +3 bps to 2.55%

COMMODITIES

  • Oil – WTI futures rose US5c to US$57.71 with no new developments.
  • Gold was down US$6.00 0.5% to US$1,392.50, mostly a stronger US dollar issue
  • Iron Ore – Commsec has iron ore up US$4.85 or 4.1% to US$122.60 a tonne,
  • LME metals – Mixed. Cu -1.04%, Ni +0.20%, Al +0.86%.

ECONOMIC DATA, NEWS & POLITICS

  • Economic data – June NFIB Small Business Optimism Index 103.3 (prior 105.0); May Job Openings and Labor Turnover Survey 7.323m (prior 7.372m)
  • US-China relations – The US approved the sale of $2.2bn worth of tanks, surface-to-air missiles, and other arms to Taiwan.
  • Japanese data – May Average Cash Earnings -0.2%yoy (expected -0.6%; last -0.3%) and Overtime Pay +0.8%yoy (last -1.1%). June Machine Tool Orders -38.0%yoy (last -27.3%).
  • Australia economic data – June NAB Business Confidence fell to 2 from 7, as expected.
  • ECB hurting – Germany’s CDU leader, Annegret Kramp-Karrenbauer, said that the ECB’s interest rate policy is causing issues for savers and that its duration should be curbed.
  • Brexit – UK Labour leader, Jeremy Corbyn, said that his party will call on the next prime minister to put the Brexit deal up for a referendum.
  • European data – Italian May Retail Sales -0.7% (expected 0.2%; last -0.3%) to be -1.8%yoy (expected 3.8%; last 4.2%).

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s