Thursday: 24th May 2018

OPENING CALL: The Australian market looks to open flat with SPI Futures down 12 points.

The Australian share market is expected to open lower after falls in base metals prices, and Wall Street spending most of its session in negative territory, before ending slightly higher after the release of the US Federal Reserve minutes.

US stocks ended with small gains on Wednesday after minutes from the Federal Reserve’s latest meeting suggested higher inflation may not result in faster interest rate hikes.

Overnight Summary


Market Quotes by TradingView

Each Market In Focus

Australian Market

The Australian share market is expected to open lower after falls in base metals prices, and Wall Street spending most of its session in negative territory, before ending slightly higher after the release of the US Federal Reserve minutes.
At 0700 AEST on Thursday, the Australian share price futures index was down 12 points, or 0.2 per cent, at 6,024 points.
The Australian share market on Wednesday closed slightly lower as energy shares tumbled after Santos rejected a $US10.9 billion takeover offer.
The benchmark S&P/ASX200 was down 9.4 points, or 0.16 per cent, at 6,032.5 points, meanwhile, the broader All Ordinaries index was down own 9.7 points, or 0.16 per cent, at 6,140.2 points.
In equities news on Thursday, shareholders will vote on Westfield Corporation’s takeover by Unibail-Rodamco, and miner and metals producer Alumina hold its annual general meeting.

US Markets

US stocks ended with small gains on Wednesday after minutes from the Federal Reserve’s latest meeting suggested higher inflation may not result in faster interest rate hikes.
Most Fed policymakers thought it likely another interest rate increase would be warranted “soon” if the US economic outlook remains intact, and that many participants saw little evidence of general overheating of the labour market, minutes of the central bank’s last policy meeting showed.
“The market is probably breathing a little bit of a sigh of relief knowing that inflation even a bit above two per cent may not necessarily mean a faster rate of increases,” said Mike Baele, managing director at US Bank Private Client Wealth Management in Portland, Oregon.
The Dow Jones Industrial Average rose 52.4 points, or 0.21 per cent, to 24,886.81, the S&P 500 gained 8.85 points, or 0.32 per cent, to 2,733.29 and the Nasdaq Composite added 47.50 points, or 0.64 per cent, to 7,425.96.

Commodities
The spot price of gold in Sydney at 0700 AEST was $US1,293.00 per fine ounce, from $US1,290.24 per fine ounce on Wednesday.
IRON ORE: $63.74 -0.60(June contract)
Oil Futures

Oil prices were mixed as U.S. data showed big increases in crude and fuel stockpiles and as investors weighed whether the Organization of the Petroleum Exporting Countries could ramp up crude production.

Forex

A popular gauge that tracks the U.S. dollar climbed to its best level of the year, helped by a sell-off of major rivals, with the notable exception of safe-haven currencies.
The Federal Reserve’s minutes of its May monetary-policy meeting, meanwhile, showed that officials were on track to raise interest rates in June, confirming market expectations.
The ICE U.S. Dollar Index, which tracks the greenback against six rivals, was up 0.4% to 94.018 on Wednesday. The index came off its session high that put it at a new best for the year as the session drew to a close. The broader WSJ Dollar Index was up 0.1% to 87.21.
The Australian dollar is higher after Wall Street made modest gains as it appear less likely the US Federal Reserve will increase the pace of its interest rate hikes this year.
At 0635 AEST on Thursday, the local currency was worth 75.58 US cents, from 75.33 US cents on Wednesday.

European Markets

The UK’s top share index was knocked down of its highs on Wednesday and
sustained its biggest loss in two months as oil majors and commodity-related stocks fell but well-received results made Marks & Spencer a bright spot.
The blue chip FTSE 100 index closed down 1.13 per cent at 7,788.44 points. A surprise fall in British inflation pushed sterling to its lowest level against the dollar this year but failed to provide any tailwind to companies whose revenues are in foreign currencies.
“Signs of detente between the US and China have decreased, reviving the great trade war fear, while the deterioration in Japanese and eurozone PMIs have sent chills down the spines of those hoping that the synchronised global expansion had further to run”, said Chris Beauchamp, an analyst at IG.

Asian Markets

Asian shares were mostly weaker on Wednesday with investors cautious after US President Donald Trump tempered optimism over progress made in trade talks between the world’s two largest economic powers.
MSCI’s broadest index of Asia-Pacific shares outside Japan was down 0.3 per cent, while Japan’s Nikkei lost 1.2 per cent to end at a one-and-a-half-week low and the Shanghai Composite Index retreated 1.4 per cent.
Trump said on Tuesday he was not pleased with recent trade talks between the United States and China, souring the improved market sentiment following weekend comments from US Treasury Secretary Steven Mnuchin that the “trade war” is “on hold”.
On Wednesday, New Zealand’s S&P/NZX 50 index fell 0.7 per cent, to 8,553.23.

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