Thursday: 15th March 2018

OPENING CALL: The Australian market looks to open lower with SPI Futures down 5 points.

The Australian share market is expected to open lower after US stocks lost ground on renewed fears of a trade war as the US government targets Chinese import.
 US stocks fell on Wednesday after President Donald Trump sought to impose fresh tariffs on China, intensifying fears of a trade war that could raise costs and hurt overseas sales for US companies.
The Australian dollar on Thursday morning was marginally higher despite falls on Wall Street, still getting support from strong local consumer confidence data released on Wednesday and faster Chinese industrial production growth.

Overnight Summary


Market Quotes by TradingView

Each Market In Focus

Australian Market

The Australian share market is expected to open lower after US stocks lost ground on renewed fears of a trade war as the US government targets Chinese import.
At 0700 AEDT on Thursday, the Australian share price futures index was down five points, or 0.08 per cent, at 5,934.
The Australian share market on Wednesday closed lower after investor confidence was dented by US President Donald Trump’s surprise sacking of his secretary of state, Rex Tillerson.
The benchmark S&P/ASX200 index was down 39.4 points, or 0.66 per cent, at 5,935.3 points, while the broader All Ordinaries index was down 34.5 points, or 0.57 per cent, at 6,042.6 points.

US Markets

US stocks fell on Wednesday after President Donald Trump sought to impose fresh tariffs on China, intensifying fears of a trade war that could raise costs and hurt overseas sales for US companies.
The Trump administration is pressing China to cut its trade surplus with the United States by $100 billion, the White House said Wednesday.
Trump is looking to levy tariffs on up to $US60 billion ($A76.1 billion) of Chinese imports, targeting the technology, telecom and apparel sectors, sources told Reuters on Tuesday.
“There’s trade war talk going on,” said Michael O’Rourke, chief market strategist at JonesTrading in Greenwich, Connecticut. “We saw people taking profit amidst the uncertainty.”
Trump has already imposed tariffs on steel and aluminum imports as well as solar panels and washing machines, sparking threats of retaliation from some trade partners.
Boeing tumbled 2.7 per cent, leading the losers on the Dow.
Heading into the final hour of trade, the Dow Jones Industrial Average was down 263.14 points, or 1.05 per cent, to 24,743.89, the S&P 500 lost 17.01 points, or 0.62 per cent, to 2,748.30 and the Nasdaq Composite dropped 18.23 points, or 0.24 per cent, to 7,492.78.

Commodities

Gold futures ended lower on Wednesday, giving up a small portion of what they gained a day earlier, as the market marked a decade since prices first topped $1,000 an ounce.
Some strength in the dollar pressured prices Wednesday, even as data showed that wholesale inflation prices rose by a mild 0.2% in February, and retail sales fell in February for the third month in a row.
IRON ORE: $69.88 +1.14 (April contract)

Oil Futures

Oil prices rose Wednesday, recovering from losses in earlier trading as a drop in fuel stockpiles outweighed larger-than-anticipated increase in crude inventories and relentlessly rising U.S. production.
Light, sweet crude for April delivery rose 25 cents, or 0.41%, to $60.96 a barrel on the New York Mercantile Exchange. Brent, the global benchmark, rose 25 cents, or 0.39%, to $64.89 a barrel on ICE Futures Europe.

Forex

The U.S. dollar edged higher as some investors adopted the view that inflation will accelerate over a longer timetable.
The WSJ Dollar Index, which measures the currency against a basket of 16 others, rose less than 0.1% to 83.59. The dollar gained against the euro and declined versus the yen.
The dollar was weighed down by a Commerce Department report Wednesday that showed sales at U.S. retailers fell 0.1% in February, marking a three-month slide. Much of the decline was tied to lower sales of cars and weak gasoline prices. When excluding cars and gasoline — spending on which can swing wildly month to month — retail sales climbed
0.3% last month.

Australian Dollar:
The Australian dollar is only marginally higher, as falls on Wall Street weighed on the currency after US President Donald Trump moved to impose new tariffs on China, raising fears of a trade war.
At 0635 AEDT on Thursday, the local currency was worth 78.83 US cents, up from 78.75 US cents on Wednesday.

European Markets

British shares gave up early gains and finished in negative territory on Wednesday as points gained by Prudential and mining stocks were overturned by simmering fears of a global trade war.
The blue chip FTSE 100 index closed down 0.09 per cent at 7,132.69 points, slightly above the pan-European STOXX 600, down 0.15 per cent, the French stock market was down 0.18 per cent, but the Dax in Germany was up 0.14 per cent.
“The positive mood in Europe has waned after US markets turned lower,” David Madden from CMC Markets said.
The showdown between Britain and the Kremlin about how a Soviet-era nerve toxin was used to attack a Russian ex-spy had little impact on British shares.
Insurer Prudential was the top gainer, its shares rising 5.1 per cent after it said it would demerge its UK and Europe retirement and asset management business from its international insurance business.

Asian Markets

Asian shares faltered as investors fretted over the threat of new US tariffs on Chinese imports.
MSCI’s broadest index of Asia-Pacific shares outside Japan stumbled 0.7 per cent, retreating from a one-and-a-half month high on Tuesday, with the technology sector the biggest drag.
Japan’s Nikkei dropped 0.87 per cent. China’s SSE Composite index and the blue-chip CSI 300 fell 0.5 per cent each.
Large Asian technology stocks such as LG Display , Tencent Holdings and Taiwan Semiconductor were all down by more than one per cent.
“A full-on global trade war is unlikely but there may not be much peace on the trade front either,” said Sydney-based AMP Chief Economist Shane Oliver. “A US-China trade war is the main risk.”
Investors suspect policymakers who favour protectionism will also seek to use the currency as a trade weapon, if not overtly then through benign neglect.
The S&P/NZX 50 index on Wednesday fell 0.48 per cent, to 8,432.63.

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