Tuesday 18th June 2019

OPENING CALL: The Australian share market is expected to open higher. The SPI200 futures contract was up 1 points.

European plane maker Airbus intends to develop its longest-range single-aisle plane yet, adding pressure on rival Boeing.


The National Association of Home Builders housing market index fell to 64 this month from an unrevised level of 66 in May, the trade group said. Economists surveyed expecteda reading of 67 in June.

Overnight Summary

Market Quotes by TradingView

Each Market In Focus

Australian Market

A midafternoon rebound faded by the close for Australia’s stock benchmark, leaving it
below Friday’s latest decade best. The ASX 200 dropped 0.35% to 6530.9 after rising in
six of the prior 8 trading days.
Commodity stocks and REITs fell nearly 1% while the heavily weighted financials gained
0.3% and utilities jumped 0.9% amid AGL again giving up the chase on telecom firm Vocus.
AGL gained 1.6%, while Vocus plunged a near-record 25%, sending the telecom sector down

US Markets

U.S. stocks rose ahead of central bank policy meetings around the world as investors
continue to bet the Federal Reserve will slash interest rates this year.
The tech-heavy Nasdaq Composite jumped 60 points, or 0.8%, lifted by shares of
companies like Facebook and Netflix. The S&P 500 rose 5 points, or 0.2%. The Dow Jones
Industrial Average added 0.2%.
Investors will be watching the Federal Reserve’s meeting concluding Wednesday for clues
on whether the central bank will slash rates this year, after ramping up expectations of
an interest-rate cut in recent weeks. The Bank of Japan and the Bank of England also hold
meetings this week.
Monday’s moves built on two weeks of gains by major U.S. stock indexes. U.S. stocks
have rallied in June after Fed Chairman Jerome Powell said the central bank would act to
sustain U.S. economic expansion in the face of escalating geopolitical and trade
tensions. Now, expectations that central bankers could send a similar message later this
week helped lift markets, analysts said. Many expect the Fed to keep interest rates
unchanged this month but cut them later this year, data from CME Group show.

Investors have also been watching for signs of how the U.S. trade battle with China
will ripple over to the domestic economy. On Monday, the Office of the U.S. Trade
Representative opened seven days of public hearings on the Trump administration’s
proposal to raise a levy on $300 billion of Chinese exports, including consumer goods
such as mobile phones and laptops.
On Monday, new data showed that a measure of U.S. home-builder confidence slipped in
June, a sign of languishing sentiment in an important sector of the economy. Meanwhile,
the Empire State Manufacturing Survey’s general business conditions index registered its
largest monthly decline on record. The New York Fed said 30% of respondents reported
business conditions that had worsened from a month earlier.


Unionized workers at Chuquicamata, which produced 1.5% of global copper output last
year, went on strike on Friday after contract negotiations with management fell through.
The disruption is likely to add to existing pressure on copper supply, but some investors
are reluctant to buy the metal as long as trade tensions between the U.S. and China are
clouding the outlook for the world economy.
Three-month copper futures on the London Metal Exchange, the global standard, have lost
1% over the past week despite the strike at Chuquicamata and are close to their lowest
level in two years at $5,820 a ton. The metal is used in everything from electrical
wiring to autos, so investors follow its price as a gauge of momentum in the world

Oil Futures

Crude oil futures prices fell, with investors digesting worrisome demand updates issued
last week and keeping tabs on typically price-supportive risks percolating in the Middle
Among the latest headlines, Iran will break the uranium stockpile limit set by Tehran’s
nuclear deal with world powers in the next 10 days, the spokesman for the country’s
atomic agency said Monday, according to the Associated Press.

West Texas Intermediate crude for July delivery fell 58 cents, or 1.1%, to settle at
$51.93 a barrel on the New York Mercantile Exchange, following two consecutive session
The attack on two tankers in the Middle East’s Strait of Hormuz last week triggered
concerns about disruptions to the global flow of oil and prompted a late-week rally in
prices, but the market failed to recoup the 4% loss from Wednesday, sending front-month
WTI prices tumbling 2.7% for last week.


The dollar is largely unchanged against other major currencies as investors await
central bank meetings, including the conclusion of the Federal Reserve’s two-day meeting.

Investors are widely expecting the Fed to cut rates at some point in the coming months.
On its own, that should depress demand for the dollar, but investors are also expecting
easy-money policies from other central banks.
The WSJ Dollar index recently up 0.04% at 90.81, close to the 52-week high of 91.30 it
reached on May 22.

European Markets

Europe’s main markets ended the day mixed as investors look toward the Federal Reserve meeting on Wednesday.
France’s CAC 40 closed 0.4% higher and Italy’s FTSE MIB ended 0.1% up. However, Spain’s
IBEX 35 fell 0.7%, Germany’s DAX ended 0.1% lower and the Stoxx Europe 600 closed down

Asian Markets

China’s Shenzhen Stock Exchange and Korea’s Kospi fell 0.2%, but Hong Kong’s Hang Seng
gained 0.6% after authorities indefinitely suspended debating a controversial extradition
bill that had sparked a wave of protests across the city. Japan’s Nikkei was mostly
Indian shares underperformed Asian peers, logging their 4th straight decline, which was
the first in a month. The BSE Sensex fell 1.3% at 38960.7.
Asia’s benchmarks have generally moved little, with many standing within 0.3% of their
Friday close.

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