Australian market expected to open higher 01/10/19

In Currency Point, Daily Analysis, Technical Analysis
October 1, 2019

OPENING CALL: The Australian share market is expected to open lower. The SPI200 futures contract expected to open up 5 points.

The U.K. economy shrank slightly more sharply in the three months through June than previously estimated, as factory output slumped and businesses cut back on investment in the face of Brexit uncertainty.

Following a botched IPO attempt and the ouster of its CEO, WeWork is planning thousands of job cuts, putting extraneous businesses up for sale and shedding some luxuries to stop bleeding cash.

Overnight Summary

Market Quotes by TradingView

Each Market in Focus

Australian Market

Australian shares ended lower, with the benchmark S&P/ASX 200 index closing down 0.4% at 6688.3. Consumer-discretionary shares dipped 0.8% and financials ended 0.7% lower, though energy shares eked out a 0.2% gain.

Webjet fell the most with a decline of 4.3%, but agricultural chemical company Nufarm surged 26% after it agreed to sell its South American business to Japan’s Sumitomo Chemical.
Despite ending lower, the Aussie benchmark held on to a 1.3% gain for the month of September.

US Market

The S&P 500 jumped intraday, on track to enter the fourth quarter with its biggest year-to-date gain in more than two decades.
The broad stock-market index has rallied 19% this year-its best performance in the first three quarters of a year since 1997. The advance comes alongside a rally in both bonds and commodities.
Investors battled concerns about trade and currency clashes between the U.S. and China, recession signals and, recently, political headwinds in the third quarter.

Expectations that the Federal Reserve would maintain accommodative monetary policy tended to outweigh fears about growth as the central bank slashed rates for the first time in more than a decade in July and trimmed them again in September.

The Fed’s moves are part of a trend around the world, with 16 central banks lowering interest rates in the third quarter, according to JPMorgan Chase & Co. analysts, who expect almost two dozen more to slash rates in the fourth quarter. They also expect the Fed to cut rates again this year.
Meanwhile, meager returns world-wide-as the pile of negatively yielding debt swelled to more than $15 trillion-led investors to keep buying stocks.

The S&P 500 rose 0.7% Monday, lifted by shares of technology and health-care companies, as gains accelerated midday. The Dow Jones Industrial Average added 153 points, or 0.6%, boosted by shares of Apple, its biggest gainer. The Nasdaq Composite climbed 0.9%.

Commodities

Gold futures fell sharply, settling at their lowest in two months as strength in the dollar, U.S. stocks and bond yields dulled investor demand for the precious metal.

December gold fell $33.50, or 2.2%, to settle at $1,472.90 an ounce. That was the lowest finish since Aug. 2, according to FactSet data. Prices for the contract lost 3.7% for the month, but gained 3.4% for the quarter.
Copper fell, giving up gains made earlier in the trading day as the strengthening U.S. dollar put broad pressure on commodity prices. The base metal declined 0.8% at $5,715 a ton on the London Metal Exchange.

Oil Futures

U.S. benchmark oil prices ended lower for a fifth straight session — the longest streak of declines since Nov. 13, 2018 when it fell for 12 straight sessions. The Nymex crude oil front-month contract for November deliver ended down 3.3% at $54.07/bbl., the lowest closing price in nearly four weeks, after the CEO of state-owned oil giant Saudi Aramco said the company has restored full oil output after a Sept. 14 attack on oil
facilities.

Forex

Safe-haven demand for the U.S. dollar following reported U.S. plans to restrict capital flows into China helped send EUR/USD to its lowest since May 2017 at 1.0885, while the DXY dollar index also reached its highest since mid-2017.
Although EUR/USD recovered back above 1.09, and last traded at 1.0906, it remains vulnerable, particularly given concerns about eurozone economic weakness and prospects of European Central Bank monetary easing. Traders cited EUR/USD bids around 1.0880 which
help prop it up for now, but UniCredit says a firm break below 1.09 could see it drop to 1.08. DXY was last up 0,3% at 99.37, having risen as high as 99.46.

European Markets

European stocks ticked higher on the last day of a volatile quarter that has been marked by huge swings across assets, as investors grappled with a series of unexpected economic and geopolitical developments.

The Stoxx Europe 600 rose less than 0.4%. Regional blue-chip benchmarks put in mixed performances, with the CAC 40 rising 0.7% and DAX making a modest 0.4% climb, while the FTSE 100 slipped 0.2%.

Asian Markets

The Japanese Nikkei 225 was down 0.6%, but closes out the quarter as one of the better performers, up 2.3%.

Among major global stock markets, Shanghai was the biggest mover, slipping 0.9% despite manufacturing numbers that were better than expected. Official data showed manufacturing activity rebounded in September mainly on improving domestic demand. Chinese stock
markets will be closed for the rest of the week to mark the 70th anniversary of the founding of the People’s Republic of China.

While the Chinese data was a positive surprise, the trend still points toward a slowdown in the world’s second-largest economy. Weaker manufacturing and export data globally has been the story of the quarter, although employment and consumer spending has remained resilient. Still, the Federal Reserve and European Central Bank have begun new rounds of looser monetary policy, supporting stock markets.

Stocks in Hong Kong rose 0.5% after another weekend of pro-democracy protests. The Hang Seng has been one of the worst performing of the world’s major indices in the past three months, down nearly 9%, since the protests took a more violent turn in late July.

A big positive was a strong debut in Hong Kong for the newly listed shares of Budweiser Brewing Co. APAC, the Asia business of European beer giant Anheuser Busch InBev. The stock climbed 4.4% above its initial public offering price. Budweiser had raised $5 billion in Asia’s largest IPO this year and the funds will go towards reducing AB InBev’s debt.