Monday: 2nd July 2018

OPENING CALL: The Australian market looks to open higher with SPI Futures Up 13 points.

Australian shares are likely to start the week and the new financial year marginally higher, following Friday’s gains on Wall Street.

U.S. stocks edged higher, as investors took advantage of a momentary pause in trade tensions to boost major indexes’ gains for the second quarter.

Overnight Summary


Market Quotes by TradingView

Each Market In Focus

Australian Market

Australian shares are likely to start the week and the new financial year marginally higher, following Friday’s gains on Wall Street.
All three of Wall Street’s major stock indexes strengthened on Friday, gaining in the range of 0.08 per cent to 0.23 per cent after the world’s largest footwear maker, Nike, beat fourth-quarter profit estimates.
The Australian local share price index futures rose 0.37 per cent, or 23 points, to 6,171, a 23.6-point discount to the underlying S&P/ASX 200 index close.

US Markets

U.S. stocks edged higher, as investors took advantage of a momentary pause in trade tensions to boost major indexes’ gains for the second quarter.
The Dow Jones Industrial Average rose as much as 293 points earlier in the session before paring its gain in the final hour of trading. Shares of energy companies rose alongside a spike in oil prices, while Nike, pulled the S&P 500 and Dow industrials higher after the athletic apparel retailer reported its first sales gain in four quarters, sending shares to their highest closing price ever.
The developments offered a more stable footing for stocks after the Trump administration backed away from imposing tough new restrictions on Chinese investments in the U.S., helping to ease fears of an all-out trade war between two of the world’s biggest economies.
All three major indexes notched a second consecutive session of gains Friday after several days when the S&P 500 and Dow industrials switched between gains and losses. Equity funds suffered their second-largest ever outflow in the week through Wednesday, according to Bank of America Merrill Lynch.

Commodities

Gold prices inched higher, as a pullback in the U.S. dollar helped halt a rout in the precious metal market.
IRON ORE: $64.60 +0.28 (August contract)

Oil Futures

Oil prices reached another multiyear high, boosted by declining crude inventories and building concerns over supply disruptions.
Crude closed out its fourth straight quarter of gains, its longest winning streak since 2010. Light, sweet crude for August delivery settled up 1% to $74.15 a barrel on the New
York Mercantile Exchange, the highest settle since November 2014. Brent, the global benchmark, rose 2% to $79.44 a barrel. Threats to supply from producers from Libya to Iran to North America kept prices buoyed throughout the week, even as other countries such as Saudi Arabia prepared to increase output. U.S. prices closed up more than 10% this month.

Forex

A popular gauge for the U.S. dollar against major rivals is on track for a 5% jump in the second quarter, its strongest and first positive quarterly performance since late 2016.
In the year so far, the ICE U.S. Dollar Index has gained 2.7%, while the euro has fallen almost 3% in the same period. The WSJ Dollar Index, a broader measure of the greenback, strengthened 2.5% this year.
The greenback’s rally, which commenced in April, was fueled by supportive U.S. economic data that outperformed sluggish European economic reports, a hawkish Federal Reserve that remained on its gradual tightening track, as well as weakness in its rivals on the back of worries about trade wars.
That not withstanding, the dollar gauge was lower on Friday, the last trading day of the quarter and the first half of the year, as its rivals gained across the board. The index was last down 0.8% at 94.647.

European Markets

The euro rallied to $1.1668, 0.9% higher from Thursday, after European Union leaders reached a deal over the divisive issue of refugees, removing some political risk that had been hanging over the shared currency. German Chancellor Angela Merkel had been under pressure on the issue at home from the more conservative Bavarian sister party of her Christian Democrats–the Christian Social Union.

Asian Markets

Stocks in Asia closed with gains on Friday, led by markets in Hong Kong, Shanghai and Shenzhen at the end of a rough week. Hong Kong’s Hang Seng climbed 1.6%, while the Shanghai Composite rose 2.2% from its lowest close since March 2016.

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