Wednesday: 23rd May 2018

OPENING CALL: The Australian market looks to open flat with SPI Futures down 4 points.

The Australian share market is expected to open flat, pulled in opposite directions by falls on Wall Street and gains in base metals prices.

US stocks closed lower on Tuesday as investors weighed comments on trade talks between the United States and China and as energy and industrial shares fell.

Overnight Summary


Market Quotes by TradingView

Each Market In Focus

Australian Market

The Australian share market is expected to open flat, pulled in opposite directions by falls on Wall Street and gains in base metals prices.
At 0700 AEST on Wednesday, the Australian share price futures index was down four points, or 0.07 per cent, at 6,043 points.
The Australian share market on Tuesday posted its largest daily fall in seven weeks due to weakness for Telstra, the major banks and mining giants.
The benchmark S&P/ASX200 was down 42.6 points, or 0.7 per cent, at 6,041.9 points, while the broader All Ordinaries index was 40.3 points, or 0.65 per cent, at 6,149.9 points.
In economics news on Wednesday, Reserve Bank Governor Philip Lowe speaks at Australia-China Relations Institute.
In equities news, the Australian Agricultural Company releases its full year results, and Woodside Petroleum holds an investor briefing.

US Markets

US stocks closed lower on Tuesday as investors weighed comments on trade talks between the United States and China and as energy and industrial shares fell.
US President Donald Trump said he was not pleased with the recent US-China trade talks and also raised doubts about the upcoming North Korea summit.
Trump also said the China trade talks “were a start” and that there was no deal with China on ZTE Corp. Trump has adopted a more conciliatory stance in the China talks as North Korea, whose chief ally is Beijing, has called into question a summit planned for next month in Singapore.
“We’re still in limbo with the North Korea situation so unless we get something definitive, I don’t think we’re going to see any major catalyst in that category,” said Alan Lancz, president at Alan B. Lancz & Associates Inc., an investment advisory firm, based in Toledo, Ohio.

Commodities

The spot price of gold in Sydney at 0700 AEST was $US1,290.92 per fine ounce, from $US1,288.10 per fine ounce on Tuesday.
IRON ORE: $64.34 -1.12 (June contract)

Oil Futures

Oil prices again broke through the $80 a barrel threshold in the morning after the U.S. threatened to tighten economic sanctions against Iran before pulling back as the stock market sold off.

Forex

The dollar was little changed, as investors stayed on the sidelines ahead of minutes from the Federal Reserve’s most recent meeting.
The WSJ Dollar Index, which gauges the U.S. currency against a basket of 16 others, was unchanged at 87.01.
Fed minutes due out Wednesday afternoon could endanger the dollar’s recent rally if the central bank’s outlook on the economy proves more dovish than expected.
Rising U.S. bond yields have pushed the dollar up more than 4% against its peers over the last three months.

The Australian dollar is slightly lower after Wall Street fell, weighed down by comments from US President Donald Trump about the US-China trade talks.
At 0635 AEST on Wednesday, the local currency was worth 75.76 US cents, from 75.88 US cents on Tuesday.

European Markets

The UK’s top share index ventured further into new unchartered highs on Tuesday as shares in financials and miners rose further, triggering anticipations it could soon reach the 8,000 points benchmark.
The blue chip FTSE 100 index closed up 0.2 per cent and hit a fresh record of 7,903.50 points during the session before reducing its gains to 7877.45 points.
“At the rate it’s going, we should hit this round number (8,000 points) by Thursday, if not earlier,” said IG’s market analyst Chris Beauchamp during morning trading.
Other European shares were up as Italian government bond yields slipped from multi-month highs after six days of steep selling tied to the growing likelihood of a government comprised of the anti-establishment 5-Star Movement and the far-right League.
Analysts said the price falls of recent days might render the debt attractive again for some.

Asian Markets

Asian shares skidded on Tuesday as a strong dollar sapped demand for emerging market assets while surging oil prices stoked concerns about a flare-up in inflation and faster US interest rate increases.
Europe was set for a muted start, with futures for London’s FTSE index and the Eurostoxx 50 up 0.1 per cent each but E-Minis for the S&P 500 were flat.
Japan’s Nikkei ended 0.2 per cent lower and Australian shares fell 0.7 per cent.
Chinese stocks were in the red too with the blue-chip CSI300 off 0.5 per cent.
Liquidity was relatively thin due to holidays in South Korea and Hong Kong.
Even though most major Asian markets edged lower, MSCI’s broadest index of Asia-Pacific shares outside Japan managed to eke out a small 0.17 per cent gain.
On Tuesday, New Zealand’s S&P/NZX 50 index fell 0.03 per cent, to 8,613.32.

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