Monday: 15th January 2018

OPENING CALL: The Australian market looks to open higher with SPI Futures up 31 points.

Australian dollar once again higher on US dollar weakness.
Wall Street has continued its rally with record closing highs as the fourth-quarter earnings season kicked off with solid results from banks and robust retail sales drove investor optimism about economic growth.
Oil’s rally continued to gather steam, with prices rising for a fifth straight day to fresh three-year highs as investors continued to bet on rising demand and tighter supplies.

Overnight Summary


Market Quotes by TradingView

Each Market In Focus

Australian Market

The Australian share market looks set to open sharply higher.
At 0700 AEDT on Monday, the share price futures index was up 31 points, or 0.52 percent, at 6,049.
In economic news on Monday, the CoreLogic capital city house prices survey for the week just ended is due out.
No major equities news is expected.
The Australian market on Friday closed flat, as strong gains by miners and some energy companies offset losses among financial, property and consumer stocks.
The benchmark S&P/ASX200 index rose 2.5 points, or 0.04 percent, to 6,070.1.
The broader All Ordinaries index lifted 0.6 points, or 0.01 percent, to 6,176.8 points.

US Markets

Wall Street has continued its rally with record closing highs as the fourth-quarter earnings season kicked off with solid results from banks and robust retail sales drove investor optimism about economic growth.
The S&P 500 and Nasdaq both registered their eighth record closing highs out of the first nine trading days of 2018, while the Dow boasted its sixth closing high of the year.
JPMorgan, the biggest US lender by assets, said a US tax overhaul would help future profits by reducing its tax bill and stimulating more business. The bank’s shares rose 1.7 percent.
Investors were also hopeful 2018 financial forecasts from US companies would beat Wall Street estimates as many analysts may not have tax savings fully reflected in their models as the tax bill was signed into law so late in December.
The Dow Jones Industrial Average rose 0.89 percent, to 25,803.19, the S&P 500 gained 0.67 percent, to 2,786.24 and the Nasdaq Composite added 0.68 percent, to 7,261.06.

Commodities

Gold prices rose for the third straight session Friday after data was released showing U.S. consumer prices rose in December, a sign that inflation ended the year on a somewhat stronger note.
Among base metals, front-month copper for January delivery swung between small gains and losses and closed down 0.4% at $3.20 a pound. The rally that sent the industrial metal to four-year highs late last year has paused recently, but some analysts expect favorable demand from China, the world’s largest consumer, and supply disruptions to continue supporting prices.
IRON ORE: $75.66 -0.40(February contract)

Oil Futures

Oil’s rally continued to gather steam, with prices rising for a fifth straight day to fresh three-year highs as investors continued to bet on rising demand and tighter supplies.
U.S. crude futures settled up 50 cents, or 0.78%, at $64.30 a barrel on the New York Mercantile Exchange. Brent, the global benchmark, rose 61 cents, or 0.88%, to $69.87 a barrel on ICE Futures Europe.

Forex

The dollar fell to its lowest level in more than three years Friday, as expectations of accelerating growth abroad spurred investors to sell the U.S. currency and pile into the euro.
The ICE Dollar Index, which measures the U.S. currency against a basket of six others, was recently down 1% at 90.95, its lowest level since December 2014.
At the same time, the euro was up 1.2% to $1.2179, its highest level in a little over three years.
The European Central Bank said Thursday that it might move sooner than investors had expected to phase out its massive bond-buying program, sending the euro and eurozone government bond yields higher.
Expectations of monetary tightening outside the U.S. tends to make the dollar less attractive to yield-seeking investors, who for years had gravitated to the U.S. currency because it offered yields that were high compared with those found in other developed markets.
Australian Dollar:
The Australian dollar is back above 79 US cents.
At 0635 AEDT on Monday, the Australian dollar was worth 79.08 US cents, up from 78.79 US cents on Friday.

European Markets

Dealmaking activity drove sharp share price moves in Europe on Friday with British engineer GKN leaping after it rejected an unsolicited offer from rival Melrose.
A gain of over 26 percent in GKN and strength in the auto sector led a broad-based rally, helping the pan-European STOXX 600 benchmark end 0.3 percent higher following losses in the previous two sessions.
A rise in the euro on news that German Chancellor Angela Merkel’s conservatives and the Social Democrats had agreed on a blueprint for formal coalition negotiations held back gains but the German talks had little other impacts.
Germany’s DAX gained as much as 0.3 percent with most of Europe following suit but the strength of the euro. It closed up 0.32 percent at 13,245.03.

Asian Markets

Asian stocks resumed their ascent on Friday, supported by US earnings optimism and higher oil prices.
MSCI’s Asia ex-Japan stock index was firmer by 0.66 percent while Japan’s Nikkei index closed down 0.24 percent at 23,653.82.
Hong Kong’s Hang Seng Index ended trading at a record high, after rising for 14 consecutive days in the longest ever winning streak that reflects sustained investor optimism even after a bumper 2017.
Market sentiment was buoyed by signs of concerted global economic recovery, as well as a resurgence in index heavyweight Tencent, which jumped about 3 percent.
The Hang Seng index closed up 0.94 percent at 31,412.54. The Hang Seng China Enterprises index rose 1.41 percent to 12,468.93.
China’s main Shanghai Composite index closed up 0.10 percent at 3,428.94 points while its blue-chip CSI300 index ended up 0.46 percent at 4225.00.
The S&P/NZX50 Index dropped 0.1 percent, to 8242.35.

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