Thursday: 10th May 2018

OPENING CALL: The Australian market looks to open higher with SPI Futures up 21 points.

The Australian share market on Wednesday closed slightly higher as strong gains in oil stocks, helped offset a heavy decline in Commonwealth Bank shares.

Wall Street surged on Wednesday as surging oil prices boosted energy stocks following US President Donald Trump’s decision the previous day to quit a nuclear agreement with Iran.

Overnight Summary


Market Quotes by TradingView

Each Market In Focus

Australian Market

The Australian share market is expected to open higher.
At 0700 AEST on Thursday, the Australian share price futures index was up 21 points, or 0.34 per cent, at 6,110 points.
The Australian share market on Wednesday closed slightly higher as strong gains in oil stocks, helped offset a heavy decline in Commonwealth Bank shares.
The benchmark S&P/ASX200 was up 16.1 points, or 0.26 per cent at 6,108 points, while the broader All Ordinaries index was up 21.2 points, or 0.34 per cent, at 6,204.4 points.
In equities news on Thursday, AMP holds its annual general meeting in Melbourne, Caltex Australia also has an AGM, and cloud accounting firm Xero releases its annual earnings results.

US Markets

Wall Street surged on Wednesday as surging oil prices boosted energy stocks following US President Donald Trump’s decision the previous day to quit a nuclear agreement with Iran.
“It’s classic ‘buy on the terrible news’,” said Ian Winer, director of trading at Wedbush Securities in Los Angeles, referring to the wider market’s rally. “People had gotten way too nervous about this.”
Trump’s decision for the United States pull out of the international agreement aimed at preventing Iran from obtaining a nuclear weapon was good news for investors betting on a rise in oil prices. Crude hit its highest level in three-and-a-half years as investors bet the US withdrawal would increase risks of conflict in the Middle East and curtail global oil supplies.

Commodities

The spot price of gold in Sydney at 0700 AEST was $US1,312.19 per fine ounce, from $US1,308.01 per fine ounce on Wednesday.
IRON ORE: $66.71 -0.17 (June contract)

Oil Futures

Oil prices posted their biggest daily gains in a month, rising to fresh 3 1/2-year highs after President Donald Trump pulled the U.S. out of the Iran nuclear pact, triggering renewed economic sanctions that could reduce the oil supply of an already increasingly tight market.

Forex

The Canadian dollar and other energy-related currencies rose against the dollar Wednesday, driven by a rally in oil prices.
The U.S. dollar was recently down 0.7% against its Canadian counterpart to C$1.2854. It fell 0.8% against the Norwegian krone, and lost 0.3% against the Russian ruble.
U.S. crude futures rose 3.01% to $71.14 a barrel on the New York Mercantile Exchange after President Donald Trump pulled the U.S. out of the Iran nuclear pact, triggering renewed economic sanctions.
The Wall Street Journal Dollar Index, which measures the U.S. currency against a basket of 16 others, was recently up 0.1% at 86.66. The measure is up more than 3.6% over the last month, driven by signs that the U.S. economy continues to grow at a steady pace while an expansion in Europe and other areas falters.
The Australian dollar is higher. following a strong lead from US stocks and commodity prices.
At 0635 AEST on Thursday, the local currency was worth 74.60 US cents, up from 74.18 US cents on Wednesday.

European Markets

Oil stocks drove Britain’s leading stock index sharply higher on Wednesday after the US decision to pull out of the Iran nuclear deal sent crude prices soaring.
The FTSE 100 index jumped 1.3 per cent, easily beating other European bourses as commodities stocks surged and strong results sent tobacco firm Imperial Brands up. It was the index’s best day in a month.
Frankfurt’s DAX index was 0.24 per cent higher. and Paris’ CAC was up 0.23 per cent.
Leading the FTSE was heavyweight tobacco firm Imperial Brands, which jumped 6.2 per cent after pledging to step up divestments and reporting first-half sales and profits slightly ahead of estimates.
Oil majors Royal Dutch Shell and BP, up 3.1 per cent and 3.3 per cent respectively, delivered the biggest boost to the index as oil prices rose more than two per cent. US sanctions against Iran, an OPEC member, are expected to tighten global oil supply.

Asian Markets

Asian shares ticked lower as renewed US sanctions on Tehran were seen as disruptive for many companies that have deals with Iran.
Trump’s move is also seen as risking worsening already-tense relations between Iran and US allies in the region.
“In the very short term, it looks as if the impact of heightened geopolitical worries was limited to oil markets. But that is not the end of the story,” said Norihiro Fujito, senior investment strategist at Mitsubishi UFJ Morgan Stanley Securities.
Iran, the third-biggest producer among the Organization of the Petroleum Exporting Countries, produces about 3.8 million barrels per day (bpd), or about four per cent of the world’s oil supplies.
MSCI’s broadest index of Asia-Pacific shares outside Japan was flat, while Japan’s Nikkei fell 0.4 per cent.
On Wednesday, New Zealand’s S&P/NZX 50 index rose 0.29 per cent, to 8,619.83.

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