Thursday: 3rd May 2018

OPENING CALL: The Australian market looks to open higher with SPI Futures up 4 points.

The Australian share market is expected to open flat, after gains in base metals prices were offset by a weak lead from US stocks.

U.S. stocks edged lower Wednesday after the Federal Reserve left interest rates unchanged but reiterated plans to continue raising them gradually in response to firming inflation.

Overnight Summary


Market Quotes by TradingView

Each Market In Focus

Australian Market

The Australian share market is expected to open flat, after gains in base metals prices were offset by a weak lead from US stocks.
At 0700 AEST on Thursday, the Australian share price futures index was up four points, or 0.07 per cent, at 6,050 points.
On commodities markets, copper and nickel prices bounced off their multi-week lows as Chinese steel prices soared and a private survey showed growth in China’s manufacturing sector unexpectedly picked up in April.
The Australian share market on Wednesday posted its fourth straight day of gains, taking the major stock indexes to their highest level in two months.
The benchmark S&P/ASX200 was up 35 points, or 0.58 per cent, at 6,050.2 points, while, the broader All Ordinaries index was up 36.7 points, or 0.6 per cent, at 6,136.7 points.
In economics news on Thursday, the Australian Bureau of Statistics releases building approvals figures for March, and international trade data, also for March.
In equities news, National Australia Bank releases its half year results, and QBE Insurance and Santos hold their annual general meetings.

US Markets

U.S. stocks edged lower Wednesday after the Federal Reserve left interest rates unchanged but reiterated plans to continue raising them gradually in response to firming inflation.
The Dow Jones Industrial Average closed down 174 points, or 0.7%, to 23925 in a fourth straight session of losses. The S&P 500 declined 0.7%, and the Nasdaq Composite added 0.4%. All three indexes closed near their lows of the session.
Worries about the possibility of the Fed raising rates faster than expected have contributed to the shakiness in markets in recent weeks. Some analysts fear higher borrowing costs for companies could threaten profits while higher Treasury yields make stocks less attractive to some investors.
A recent rise in Treasury yields has also started boosting the dollar, which could make products from large multinational firms less competitive abroad.
Wednesday’s statement gave no indication that the Fed would change its pace and offered nothing to dispel market expectations that it will deliver its second rate increase of the year when policy makers meet in June. Some analysts said the statement could ease some short-term concerns but that the threat of higher rates moving forward remains in focus.

Commodities

Gold prices closed lower in regular trading but edged higher in aftermarket trading after the Fed announcement.
IRON ORE: $67.25 +1.50 (June contract)

Oil Futures

Oil prices closed higher, lifted by a positive economic outlook from the Fed and a falling U.S. dollar.

Forex

The U.S. dollar pressed the pause button on its rally, flipping back and forth between negative and positive territory following the Federal Reserve’s policy update.
The central bank left rates unchanged, as expected, while its statement was read as a signal that policy makers won’t immediately accelerate the pace of rate increases in response to a pickup in inflation.
The ICE U.S. Dollar Index, which measures the buck against a basket of six currencies, was up 0.1% at 92.569, after having hit its highest level since late December earlier in the session.
The benchmark logged a 1.9% gain for April, according to FactSet data, its best month since November 2016. For the year to date, the gauge is now up about 0.5%, having turned positive on Tuesday.
The broader WSJ U.S. Dollar Index slipped 0.1% to 86.02.
The euro fetched $1.1980, compared with $1.1992 on Tuesday, when it fell below the $1.20 mark for the first time since January.

European Markets

British shares traded higher on Wednesday, posting a fifth session of gains in a row as metal prices boosted miners and first-quarter earnings reports lifted the London stock market.
The FTSE index ended the session up 0.3 per cent at 7,543.20 points, its highest since the end of January, when sterling was, however, about four per cent higher than it is now against the US dollar.
The release of construction PMI data showed British construction activity rebounding faster than expected, pushing the pound slightly higher but with little effect on the FTSE.
Germany’s DAX 30 was up 1.5 per cent, and France’s CAC40 rose 0.16 per cent.

Asian Markets

Asian equities eased on Wednesday, while the dollar traded near a four-month high as investors await the Federal Reserve’s upcoming policy statement for clues on the future pace of US monetary tightening.
MSCI’s broadest index of Asia-Pacific shares outside Japan fell 0.3 per cent, while Japan’s Nikkei shed 0.2 per cent.

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