Thursday: 11th January 2018

OPENING CALL: The Australian market looks to open higher with SPI Futures lower 7 points.

The Australian share market looks set to open lower after a report saying that China may halt or slow its purchase of US Treasuries sent Wall Street falling.
Wall Street’s major indexes have pared some earlier losses as higher US government bond yields drive gains for banks and other financial stocks.

Overnight Summary


Market Quotes by TradingView

Each Market In Focus

Australian Market

The Australian share market looks set to open lower after a report saying that China may halt or slow its purchase of US Treasuries sent Wall Street falling.
At 0700 AEDT on Thursday, the share price futures index was down 7 points, or 0.12 percent, at 6,039.
In economic news on Thursday, the Australian Bureau of Statistics releases retail trade figures for November.
No major equities news is expected.
The Australian market on Wednesday lost ground as investors pulled back following five straight sessions of gains.
The benchmark S&P/ASX200 index fell 39.1 points, or 0.64 percent, to 6,096.7 points, while the broader All Ordinaries index lost 35.6 points, or 0.57 percent, to 6,205.9 points.

US Markets

Wall Street’s major indexes have pared some earlier losses as higher US government bond yields drive gains for banks and other financial stocks.
Markets had initially fallen on a Bloomberg report that China, the world’s biggest holder of US Treasuries, was considering slowing purchases.
The S&P financial index rose, helped by gains in Wells Fargo and JPMorgan ahead of results on Friday.
The China report weakened the US dollar, which slipped 0.25 percent, while gold jumped to its highest in four months.
In late afternoon trade, the Dow Jones Industrial Average was down 0.13 percent, at 25,352.72, the S&P 500 was down 0.20 percent, at 2,745.82 and the Nasdaq Composite was down or 0.27 percent, at 7,144.11.

Commodities

Gold prices settled higher Wednesday, recouping some of their recent losses after briefly tapping a nearly four-month intraday high as the dollar weakened against major rivals.
February gold advanced $5.60, or 0.4%, to settle at $1,319.30 an ounce after tapping a high of $1,328.60-the highest intraday level since Sept. 15, FactSet data show. The move follows two sessions of declines. The exchange-traded SPDR Gold Shares was up 0.3%.
March copper tacked on 0.6% to $3.236 a pound.
IRON ORE: $76.60 -0.14(February contract).

Oil Futures

Oil prices on Wednesday settled above $63 a barrel for the first time in more than three years after the Energy Information Administration reported an eighth-straight weekly decline in U.S. crude supplies, along with a fall in weekly production.
February West Texas Intermediate crude CLG8, +0.75% rose 61 cents, or 1%, to settle at $63.57 a barrel on the New York Mercantile Exchange.

Forex

The currencies of Canada and Mexico tumbled against the dollar Wednesday, on concerns that the U.S. will soon pull out of the North American Free Trade Agreement.
The U.S. dollar was up 0.9% against the Canadian dollar to 1.2593, on track for its biggest daily gain since October. The dollar was up 0.6% against the Mexican peso to 19.35.
Canada is increasingly convinced that U.S. President Donald Trump will soon announce that the United States intends to pull out of the North American Free Trade Agreement, Reuters News reported Wednesday, citing two government sources.
Mr. Trump has said he would pull the U.S. out of Nafta if Canada and Mexico don’t agree to a major rewrite of the 24-year-old deal. U.S. officials have proposed new language designed to reduce the overall U.S. trade deficit with its partners, and negotiators from all three countries will gather next round of Nafta talks begins later this month in Montreal.
Australian Dollar:
The Australian dollar has rebounded from its previous session’s loss against its weakened US counterpart.
At 0635 AEDT on Thursday, the Australian dollar was worth 78.32 US cents, up from 78.14 US cents on Wednesday.

European Markets

Speculation that China may cut or even halt its purchases of US Treasurys weighed on European stock markets on Wednesday, while Britain’s key index rose, hitting a new record close.
In Europe, Germany’s DAX fell 0.78 percent to 13,281.34 while the CAC 40 in France declined 0.2 percent to 5,500.
A rise in banks and oil stocks boosted the UK’s top share index to a fresh record on Wednesday as climbing bond yields supported financials across Europe.
Britain’s blue-chip FTSE 100 index was up 0.23 percent at 7,748.51 points, a new closing record and outperforming the broader European market, while mid-caps declined 0.6 percent.

Asian Markets

A drop in the scale of long-term bond purchases by the Bank of Japan on Tuesday triggered speculation over further “tapering” of asset purchases. That pushed the Japanese yen higher against the US dollar, denting some exporters’ shares.
Around the region, MSCI’s Asia ex-Japan stock index was weaker by 0.46 percent while Japan’s Nikkei 225 lost 0.26 percent to 23,788.20
But, Hong Kong and China’s key indexes fared better.
Hong Kong stocks extended their winning streak to a 12th day on Wednesday, aided by strong inflows from mainland China with one-third of the daily quota under the Shanghai-Hong Kong Stock Connect used up.
The Hang Seng index climbed 0.20 percent to 31,073.72
Mainland China’s Shanghai Composite index added 0.23 percent to 3,421.83, while its blue-chip CSI300 index lifted 0.44 per cent to 4,207.81.
The S&P/NZX50 Index dropped 0.8 percent, to 8,364.9.

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