Thursday: 8th March 2018

OPENING CALL: The Australian market looks to open higher with SPI Futures up 22 points.

Australian stocks are expected to open higher despite falls on Wall Street and commodity prices during the offshore session.
Wall Street’s main indexes are lower as US President Donald Trump looked set to impose steep tariffs on imported steel and aluminum this week, a move that could spiral into a global trade war.

Overnight Summary


Market Quotes by TradingView

Each Market In Focus

Australian Market

Australian stocks are expected to open higher despite falls on Wall Street and commodity prices during the offshore session.
At 0700 AEDT on Thursday, the Australian share price futures index was up 22 points, or 0.37 per cent, at 5919.
In economic news on Thursday, the Australian Bureau of Statistics will release international trade data for January.
The Australian share market on Wednesday fell sharply as uncertainty remains about the implications of US steel and aluminium tariffs.
The benchmark S&P/ASX200 index was down 60.4 points, or 1.01 per cent, at 5,902.0 points, while the broader All Ordinaries index was down 56.1 points, or 0.93 per cent, at 6,005.4 points.

US Markets

Wall Street’s main indexes are lower as US President Donald Trump looked set to impose steep tariffs on imported steel and aluminum this week, a move that could spiral into a global trade war.
The markets have been choppy, with the Dow falling more than 300 points, following the exit of staunch free trade supporter Gary Cohn from the White House.
“There is more of a political worry that has crept back into the market,” said Brent Schutte, chief investment strategist at Northwestern Mutual Wealth Management.
“It’s not just the tariffs, but the broader White House changing … all those things are undercurrents which are affecting market sentiment in the near-term.”
Trump also stepped up pressure against China to develop a plan to reduce its trade imbalance with the United States by a billion dollars.
Heading into the final hour of trade, the Dow Jones Industrial Average was down 209.48 points, or 0.84 per cent, at 24,674.64.

Commodities

Gold finished firmly lower Wednesday, giving back roughly half of what it gained a day earlier, pressured by upbeat February data on U.S. private sector jobs as the dollar tried to rebound from a decline in the previous session.
IRON ORE: $72.43 -0.88(April contract)

Oil Futures

Oil prices declined on Wednesday as government data showed that crude stockpiles increased and U.S. production reached new heights last week.
Light, sweet crude for April delivery fell $1.45, or 2.3%, to $61.15 a barrel on the New York Mercantile Exchange, on track to close at a three-week low. Brent, the global benchmark, lost $1.45, or 2.2%, to $64.34 a barrel.

Forex

The U.S. dollar edged higher as investors remained uncertain about what effect President Donald Trump’s tariff proposals would have on the direction of the currency.
The WSJ Dollar Index, which measures the dollar against a basket of 16 others, rose 0.1% to 83.58. The currency rose against the Canadian dollar and the Mexican peso while falling against the Japanese yen.
The Mexican and Canadian currencies have faced periodic pressure as the U.S. has sought to renegotiate the North American Free Trade Agreement. Some investors have been concerned that the U.S. could seek to cancel the three-nation trade pact, which could hurt those economies more than it would the U.S.
Treasury Secretary Steven Mnuchin said the White House will move forward with steel and aluminum tariffs despite strong pushback from congressional Republicans and business groups, one day after President Donald Trump’s top economic adviser resigned in the wake of the surprise policy decision.

Australian Dollar:
The Australian dollar is slightly higher, as falls in US markets and worries over a possible trade war place a drag on any gains the currency might make.
At 0635 AEDT on Thursday, the local currency was worth 78.12 US cents, up from 78.01 US cents on Wednesday.

European Markets

British stocks rose for a third straight session on Wednesday, although gains were tempered by the resignation of Gary Cohn, which rekindled worries the US administration was shifting towards protectionism.
The FTSE 100 ended up 0.16 per cent at 7,157.84 points, as a rally in engine maker Rolls Royce and gains among industrials more than offset weakness among commodity stocks.
Germany’s DAX index was up 1.09 per cent, and France’s CAC 40 was up 0.34 per cent.
“Whilst the rhetoric has clearly increased in recent days, particularly with the timing of Gary Cohn’s departure, the key tests are whether Donald Trump proceeds to sign this order but also what other nations do in response,” said Edward Park, investment director at Brooks Macdonald in London.

Asian Markets

Asian stocks slumped on Wednesday after a key advocate for free trade in the White House resigned, fanning fears that President Donald Trump will proceed with tariffs and risk a trade war.
MSCI’s broadest index of Asia-Pacific shares outside Japan was down 0.3 per cent, while Japan’s Nikkei retreated 0.77 per cent, and Hong Kong’s Hang Seng slipped 1.04 per cent.
“If you’re looking for an excuse to sell, this is the kind of announcement that certainly causes short-term downward pressure,” said Rick Meckler, president of investment firm LibertyView Capital Management in New Jersey, regarding Cohn’s resignation.
“He (Cohn) came from Wall street and certainly large institutional investors felt he was very credible in his spot.”
The S&P/NZX 50 index fell 0.52 per cent, to 8,284.34.

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