Friday: 6th April 2018

OPENING CALL: The Australian market looks to open higher with SPI Futures up 18 points.

The Australian share market is expected to open higher as US stocks rose for a third day – their first three-day gains in about a month.

On Wall Street, the Dow Jones index and the S&P 500 posted gains for a third day in a row, the longest streak in about a month, as investors’ worries about an escalating trade conflict between the United States and China eased and their focus on upcoming earnings grew.

Overnight Summary


Market Quotes by TradingView

Each Market In Focus

Australian Market

The Australian share market is expected to open higher as US stocks rose for a third day – their first three-day gains in about a month.
At 0700 AEST on Friday, the Australian share price futures index was up 18 points, or 0.31 per cent, at 5,788.
Australian shares on Thursday ended higher, led by gains by the big four banks.
The benchmark S&P/ASX200 closed up 27.4 points, or 0.48 per cent, at 5,788.8 points, while the broader All Ordinaries index ended up 24.3 points, or 0.41 per cent, at 5,888 points.

US Markets

On Wall Street, the Dow Jones index and the S&P 500 posted gains for a third day in a row, the longest streak in about a month, as investors’ worries about an escalating trade conflict between the United States and China eased and their focus on upcoming earnings grew.
Boeing, among the hardest-hit stocks on Wednesday after China retaliated with $50 billion in tariffs on US goods, rose 2.7 per cent on Thursday, giving the Dow its biggest boost, followed by Goldman Sachs, up 1.3 per cent.
“We’re three to six months away from seeing anything, and in three to six months, there can be a lot of negotiating. It wouldn’t take much to make this a less dramatic issue,” said Peter Tuz, president of Chase Investment Counsel in Charlottesville, Virginia.
On Wednesday, President Donald Trump’s top economic adviser Larry Kudlow said the administration was involved in a “negotiation” with China rather than a trade war.
Optimism over first-quarter earnings increased, with JPMorgan Chase and other financials expected to kick off the reporting period next week.

Commodities

Gold prices slid, as a rising dollar and bets that the U.S. and China will negotiate new trade practices to avoid a trade war crimped demand for the yellow metal.
The spot price of gold in Sydney at 0700 AEST was $US1,326.35 per fine ounce, from $US1,325.92 per fine ounce on Thursday.
IRON ORE: $61.90 -0.36(May contract)

Oil Futures

Oil prices edged higher as fears that trade restrictions will crimp global economic growth took a back seat to declining U.S. inventories.
U.S. crude futures rose 17 cents, or 0.27%, to $63.54 a barrel on the New York Mercantile Exchange. Brent, the global benchmark, rose 31 cents, or 0.46%, to $68.33 a barrel on ICE Futures Europe.

Forex

The dollar rose intraday, as investors unwound bets against the currency a day ahead of key U.S. economic data.
The WSJ Dollar Index, which gauges the U.S. currency against a basket of 16 others, was recently up 0.4% at 84.18.
A stronger-than-expected U.S. employment number on Friday could bolster the case for the Federal Reserve to raise rates at a faster pace. Expectations of higher rates tend to support the dollar, as rising borrowing costs make the currency more attractive to yield-seeking investors.
Australian Dollar:
The Australian dollar is slightly lower, as the US dollar continues its recovery from recent declines, ahead of what is expected to be some strong US jobs figures to be released on Friday night (AEST).
At 0635 AEST on Friday, the local currency was worth 7x.xx US cents, down from 76.93 US cents on Thursday.

European Markets

British blue chip shares rose to their highest level in more than three weeks on Thursday as the threat of a trade war between the United States and China appeared to fade.
In addition, a number of analysts now believe that current valuations make British stocks worth buying. Citing “recent underperformance and cheap valuations”, Citi upgraded UK equities to “overweight”.
Citi said it expected returns of 10 per cent or better to the end of 2018 “unless a Brexit or global shock drives a sharp decelleration in growth”.
The blue-chip FTSE 100 ended up 2.4 per cent, its biggest one-day gain since June 2016. The mid-caps index rose 1.6 per cent.
Major mainland European stock indexes surged two per cent or more, with Germany’s exporter-heavy DAX, the market most exposed to China, climbing 2.90 percent.

Asian Markets

Asian shares bounced from two-month lows on Thursday as world equities
recovered from a selloff triggered by escalating Sino-U.S. trade tensions, with investors hoping a full-blown trade war between the world’s two biggest economies can be averted.
Sentiment was lifted as the United States expressed willingness to negotiate with China to ease trade tensions between the two countries.
The MSCI’s broadest index of Asia-Pacific shares outside Japan was up 0.6 per cent, a day after it hit its lowest in almost two months.
Japan’s Nikkei ended 1.5 per cent higher. Markets in mainland China, Hong Kong and Taiwan were closed for a pubic holiday on Thursday.
On Thursday, New Zealand’s S&P/NZX 50 index fell 0.41 per cent, to 8,8363.99.

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