Friday: 25th May 2018

OPENING CALL: The Australian market looks to open lower with SPI Futures down 27 points.

The Australian share market is expected to open lower after Wall Street closed lower, after the cancellation of the US-North Korea summit.

US stocks mostly eased on Thursday after President Donald Trump cancelled a planned summit with North Korea’s Kim Jong Un and ordered a probe of auto imports, while gains in Netflix pushed its market value to a record.

Overnight Summary


Market Quotes by TradingView

Each Market In Focus

Australian Market

The Australian share market is expected to open lower after Wall Street closed lower, after the cancellation of the US-North Korea summit.
At 0700 AEST on Friday, the Australian share price futures index was down 27 points, or 0.45 per cent, at 6,016 points.
The Australian share market on Thursday edged higher as weakness among the banks, miners and energy companies was offset by gains by retailers and industrial stocks.
The benchmark S&P/ASX200 was up 4.6 points, or 0.08 per cent, at 6,037.1 points, while the broader All Ordinaries index was up 3.8 points, or 0.06 per cent, at 6,144.1 points.
On Friday morning the Australian dollar was slightly higher despite falls by US equities.

US Markets

US stocks mostly eased on Thursday after President Donald Trump cancelled a planned summit with North Korea’s Kim Jong Un and ordered a probe of auto imports, while gains in Netflix pushed its market value to a record.
The auto probe, ordered on Wednesday, added to worries of another potential trade conflict when tensions with China simmered.
Early on Thursday, Trump cancelled the June 12 meeting citing Pyongyang’s “open hostility,” even after North Korea followed through on a pledge to blow up tunnels at its nuclear test site.
Market participants said the sharp drop after the summit was cancelled was a knee-jerk reaction.

Commodities

Gold rallied, settling above the key $1,300-an-ounce level for the first time in more than a week, as the U.S. stock market, dollar and Treasury yields declined following President Donald Trump’s cancellation of a planned meeting with North Korean leader Kim Jong Un.
IRON ORE: $65.13 +1.39 (June contract)

Oil Futures

Oil prices eased amid the stock market’s tumble and growing expectations that the production cut pact that helped sop up a glut of crude could be eased.
Brent crude, the global oil benchmark snapped a three day streak of gains to fall $1.01, or 1.27%, to $78.79 a barrel on London’s ICE Futures exchange. On the New York Mercantile Exchange, West Texas Intermediate futures fell $1.13, or 1.57%, to $70.71 a barrel — their biggest single day drop in more than a month.
Oil prices followed stock indexes lower after President Donald Trump called off a summit with North Korea.

Forex

The U.S. dollar index extended its recent downtrend, pulling further from a 2018 peak, after President Donald Trump canceled a North Korean summit and potential import tariffs on cars brought up renewed fears over trade wars.
The ICE U.S. Dollar Index dropped 0.3% to 93.754, after rising to its highest level since mid-December on Wednesday. The broader WSJ Dollar Index slipped 0.2% to 87.00.
Haven currencies, meanwhile, were on a roll and strengthened against the U.S. counterpart. The dollar slipped to a two-week low and last bought Y109.27, down from Y110.08 against the Japanese yen while trading down to a three-week nadir of 0.9913 from 0.9958 against the Swiss franc.
Meanwhile, the greenback jumped to 1,082.47 from 1,077.25 against the South Korean won late Wednesday in New York. The won-Japanese yen pair slipped 1.3%, with the won buying Y0.1009.

European Markets

President Donald Trump’s decision to cancel a summit with North Korean leader Kim Jong Un weighed on British shares in afternoon trading, while gains in sterling prompted by better retail sales data also bruised the internationally-exposed FTSE 100.
The blue chip index closed down 0.92 per cent at 7,716.74 points as global markets took a hit when Trump announced he had called off the June 12 summit “based on the tremendous anger and open hostility” from Pyongyang.
A surprise fall in British inflation pushed sterling lower against the dollar, adding headwind to companies whose revenues are in foreign currencies.
On the European mainland, German carmakers Daimler, BMW and Volkswagen dropped 1.7 to 2.8 per cent.
Germany’s benchmark DAX index fell 0.94 per cent and Europe’s autos sector was the worst-performing, losing 1.8 per cent.

Asian Markets

Asian shares fell on Thursday after the US government launched a national security probe into car imports that could lead to new tariffs, and President Donald Trump’s comments suggested setbacks in US-China trade talks.
MSCI’s broadest index of Asia-Pacific shares outside Japan was about 0.1 per cent higher, but Japan’s Nikkei stock index fell 1.1 per cent as auto shares slumped. South Korea’s KOSPI lost 0.24 per cent.
A broad MSCI index of car and car parts companies fell 1.1 per cent. Tokyo’s SE TOPIX transport equipment index lost three per cent.
The US Commerce Department said on Wednesday that it would launch a national security investigation into car and truck imports under Section 232 of the Trade Expansion Act of 1962, a move that could lead to tariffs like those imposed on steel and aluminium in March.
On Tuesday, New Zealand’s S&P/NZX 50 index rose 0.44 per cent, to 8,590.77.

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