Friday: 9th February 2018 - Aussie Market looks to open lower after Wall Streets key index took a further tumble.

OPENING CALL: The Australian share market looks set to open comfortably higher after Wall Street’s key indexes again swung between gains and losses, though less brutally than earlier in the week.

US stocks have swung up and down in choppy trading as technology and energy stocks fall, though with milder momentum than earlier in the week.
The benchmark S&P 500 edged lower after two days of big moves, including its largest single-day percentage loss in more than six years on Monday.
Oil prices dropped Wednesday, with the U.S. benchmark marking its lowest settlement in about a month.

Overnight Summary


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Each Market In Focus

Australian Market

The Australian share market looks set to open around 1.5 per cent lower after Wall Street’s key index again take a painful tumble.
At 0700 AEDT on Friday, the share price futures index was down 82 points, or 1.41 percent, at 5,730.Shrugging off early weakness on falling commodities stocks, Australia’s benchmark finished modestly higher as financials joined a recovery they largely missed out on Wednesday.
Up for a second day after starting the week sharply lower, the S&P/ASX 200 rose 0.2% to 5890.7.
National Australia Bank climbed 2.3% following its fiscal first quarter result, though Commonwealth Bank fell a further 0.4% after Wednesday’s post-earnings drop to put the week’s skid at 5.3%. The energy sector fell 1.8% on the overnight slide in oil prices, while major miners BHP and Rio Tinto dropped as metals also shrunk.

US Markets

The Dow Jones Industrial Average fell more than 700 points intraday as worries about rising interest rates again rattled markets.
A shaky day in the bond market appeared to spook equity investors, as the Dow industrials recently dropped 600 points, or 2.4%, to 24293. Earlier in the session, the
Dow fell as much as 704 points. The yield on the benchmark 10-year U.S. Treasury note was at 2.848%, near its highest level since January 2014, from 2.843% on Wednesday, according
to Tradeweb.
Fears that a pickup in growth and inflation could force central banks to tighten monetary policy more quickly than expected have driven government-bond yields higher
throughout the year. That, in turn, can pressure stock prices as fixed-income interest payments become more attractive than stock dividends.
Similar concerns sparked the tumble in stocks last week when data showed wage growth accelerating at the fastest rate since 2009 — a sign that long dormant inflation could
be picking up, analysts said. Since then, stocks have taken a wild ride, giving up January’s big gains and flirting with correction territory.

Commodities

Gold settled higher, with a steady dollar and a drop in the U.S. stock market giving prices enough support to recoup some of the losses suffered over the last four sessions. als, gold for April delivery fell 1.1% to $1,314.60 a troy ounce.
April gold rose $4.40, or 0.3%, to settle at $1,319 an ounce, after scoring its lowest finish for a most-active contract since Jan. 9 on Wednesday.
It had posted losses in each of the last four sessions – the longest such stretch of losses since December. Gold futures for the week were still set for a decline of more
than 1%.
March silver also added 10.3 cents, or 0.6%, to $16.341 an ounce. The exchange-traded
SPDR Gold Shares added 0.1%, while the silver-focused iShares Silver Trust was up 0.4%

IRON ORE: 75.27 +0.78 (1.05%)

Oil Futures

Oil extended its losing streak to a fifth session, with prices for the U.S. benchmark ending at the lowest in five weeks, a day after data showed record weekly U.S. crude output and a further rise in inventories.
March West Texas Intermediate crude on the New York Mercantile Exchange fell 34 cents, or 0.6%, to $61.45 a barrel. Prices, which settled at the lowest since Jan. 2, have now fallen for five sessions in a row, the longest such streak of declines in nearly 10 months, FactSet data show.
April Brent crude, the global benchmark, shed 70 cents, or 1.1%, to $64.81 a barrel on the ICE Futures Europe exchange – also down five sessions, settling at the lowest since
Dec. 22.

Forex

The dollar reversed losses intraday, as investors bought the U.S. currency amid a fresh drop in equities.
The Wall Street Journal Dollar Index, which measures the U.S. currency against a basket of 16 others, was recently up less than 0.1% at 84.25, rebounding from 84.07 earlier in
the session.
U.S. stocks dropped intraday, as investors prepared for an expected rise in interest rates and grappled with a pickup in volatility.
The Dow Jones Industrial Average was recently down 2.1%, deepening its losses for the week.
Investors seeking shelter from the sharp drop in equity prices have helped boost the dollar in recent days, interrupting a decline that has taken the U.S. currency to its lowest level in more than three years.

European Markets

European stocks dropped, taking their cues from a selloff on Wall Street as well as a plunge in oil prices that weighed on shares of the region’s major energy companies.
The Stoxx Europe 600 index fell 1.6% to close at 374.03, partly erasing a 2% rally from Wednesday, when the benchmark broke a string of seven straight declines. The pan-European
index is now on track for a 3.6% weekly slump, which would be its worst since February 2016.
Germany’s DAX 30 index slumped 2.6% to 12,260.29, and France’s CAC 40 index fell 2% to 5,151.68. The U.K.’s FTSE 100 ended down 1.5% to 7,170.69.
European stocks had opened in negative territory, but losses deepened in the afternoon when Wall Street opened with steep losses as volatility returned to grip the market.
Concerns over rising inflation and rising bond yields have weighed on traders’ minds this week.

Asian Markets

A strong early performance in Asian equities failed to last Wednesday, as some markets barely finished higher while others skidded.
Japan’s Nikkei Stock Average, which slumped 4.7% Tuesday to fall into correction territory, posted an early 3.4% rebound but closed up just 0.2%. Hong Kong’s Hang Seng Index was down 0.9% after rising as much as 2.9% earlier, while the Shanghai Composite Index lost 1.8%.
Some asset managers are also concerned about the possibility that inflation could rise at a faster face than anticipated, driving central banks to tighten monetary policy faster.
This was the issue that sparked the first round of stock selling on Friday, driven by a rise in government-bond yields that make shares less attractive by comparison.

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