Tuesday: 12th December 2017

OPENING CALL: The Australian market looks to open higher with SPI Futures up 14 points.

The Australian share market looks set to open modestly higher after gains on virtually all major global indexes including Wall Street ahead of the Federal Reserve’s two-day policy meeting.
Wall Street indexes have moved higher with boosts from technology and energy sectors as oil prices rise while investors prepare for an expected US Federal Reserve rate hike later in the week.
Oil prices rose and the global benchmark hit its highest level since 2015 Monday after the shutdown of a major European pipeline.

Overnight Summary


Market Quotes by TradingView

Each Market In Focus

Australian Market
The Australian share market looks set to open modestly higher after gains on virtually all major global indexes including Wall Street ahead of the Federal Reserve’s two-day policy meeting.
At 0700 AEDT on Tuesday, the share price futures index was up 14 points, or 0.23 percent, at 6,018.
In economic news on Tuesday, the Australian Bureau of Statistics is slated to release September quarter home prices data and October lending finance figures.
The ANZ-Roy Morgan Consumer Confidence weekly survey is also due out, as is the ACCI-Westpac Survey of Industrial Trends.
In equities news, Tatts Group has its annual general meeting and shareholders vote on the merger with Tabcorp.
The Australian market on Monday closed flat ahead of this week’s key data releases.
The benchmark S&P/ASX200 index rose 3.9 points, or 0.07 percent, to 5,998.3 points.
The broader All Ordinaries index gained 4.5 points, or also 0.07 percent, at 6,081.9 points.
US Markets
Wall Street indexes have moved higher with boosts from technology and energy sectors as oil prices rise while investors prepare for an expected US Federal Reserve rate hike later in the week.
The equity market appeared to shrug off an explosion at one of New York’s busiest commuter hubs early on Monday morning that officials called an attempted terrorist attack. The suspect wounded himself and three others.
Traders, waiting for the Fed’s two-day rate setting meeting to begin on Tuesday (US time), see an 85 percent probability for a third rate hike this year, according to CME Group’s Fedwatch tool.
The Dow Jones Industrial Average was up 0.13 percent, at 24,360.73.
The S&P 500 had gained 0.23 percent, to 2,657.64.
The Nasdaq Composite had added 0.46 percent, to 6,871.67.
Commodities
Gold prices swung between small gains and losses after closing at their lowest level since July last week.
Gold for February delivery closed down 0.1% at $1,246.90 a troy ounce on the Comex division of the New York Mercantile Exchange in a third straight session of losses. The dollar rebounding from multi-year lows and concerns about higher interest rates have pushed prices roughly 7.5% off their year-to-date high from early September.
Among base metals, copper for March surged 1.1% to $3.0115 a pound, rising rapidly in mid-morning trading. Monday’s gains came after the industrial metal fell sharply last week back below $3 and about 7% off its three-year highs from October amid concerns that demand from China, the world’s largest consumer, will slow moving forward.
IRON ORE: $67.78 -0.02 ( January contract )
Oil Futures
Oil prices rose and the global benchmark hit its highest level since 2015 Monday after the shutdown of a major European pipeline.
Ineos, the British refining, and chemicals company said Monday that it would shut down the Forties Pipeline System for a “matter of weeks” after finding that a hairline fracture discovered last week had worsened.
Forex
The dollar edged lower Monday, as investors geared up for the conclusion of the Federal Reserve’s meeting later this week.
The Wall Street Journal Dollar Index, which measured the U.S. currency against a basket of 16 others, was recently down 0.1% to 87.20.
With many expecting the central bank to raise interest rates Wednesday, the focus will likely shift to the Fed’s economic and rates projections for 2018. Some analysts believe the economy could get a boost if Republican lawmakers succeed in passing sweeping tax cuts in coming weeks, pushing the Fed to raise rates at a faster pace next year.
Expectations that rates will rise tend to boost the dollar, as they make the currency more attractive to yield-seeking investors.
After appreciating around 2.5% against a basket of currencies in the last three months, the dollar “may struggle through the latter part of the week unless the Fed’s statement is obviously hawkish,” analysts at Scotiabank said in a note to investors.
The euro was up 0.1% to $1.1790.
AUSTRALIAN DOLLAR
The Australian dollar is a little higher against its US counterpart which has remained unchanged.
At 0635 AEDT on Tuesday, the Australian dollar was worth 75.32 US cents, up from 75.25 US cents on Monday.
European Markets
In Europe, persistent weakness in tech stocks outweighed strong financials on Monday, while a climb in the euro dented eurozone markets, leaving the pan-European STOXX 600 index 0.1 percent lower.
Eurozone blue-chips tumbled 0.3 percent as the single currency edged 0.3 percent higher, weighing on its mainly foreign-earning constituents.
Britain’s FTSE meanwhile outperformed and was up 0.7 percent thanks to a weaker pound.
A rotation out of the highly-valued tech sector, which has gained the most in Europe so far this year, saw investors shift to financials instead.
Chipmaker Dialog Semiconductor was among the biggest fallers, down 3.2 percent, along with software firm Temenos and video games producer Ubisoft.
Also weighing were utilities and telecoms, two sectors which tend to underperform when interest rates rise, making their steady dividend flows less attractive.
Asian Markets
MSCI’s broadest index of Asia-Pacific shares outside Japan closed 0.82 percent higher, while Japan’s Nikkei rose 0.56 percent to close at 22,938.73 points.
Hong Kong stocks rose the most in nearly three weeks on Monday, as index heavyweight Tencent rebounded for the third consecutive session.
At the close of trade, the Hang Seng index was up 1.14 percent at 28,965.29. Tencent rose 2.9 percent. The Hang Seng China Enterprises index rose 1.26 percent to 11,431.62.
China’s main Shanghai Composite index closed up 0.98 percent at 3,322.20 points while its blue-chip CSI300 index ended up 1.65 percent at 4,069.50.
The S&P/NZX 50 Index gained 0.5 percent, to 8,277.51.

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