Tuesday: 27th March 2018

OPENING CALL: The Australian market looks to open higher with SPI Futures up 33 points.

The Australian share market is expected to open higher as US stocks bounce back from last week’s losses.

Technology stocks led Wall Street’s rebound on Monday as fears over a potential trade war were calmed following reports the US and China are willing to renegotiate tariffs and trade imbalances.

Overnight Summary


Market Quotes by TradingView

Each Market In Focus

Australian Market

The Australian share market is expected to open higher as US stocks bounce back from last week’s losses.
At 0700 AEDT on Tuesday, the Australian share price futures index was up 33 points, or 0.57 per cent, at 5,811.
The Australian shares on Monday fell back to levels not seen since mid-October, with almost every sector in negative territory amid worries of a trade war.
The benchmark S&P/ASX200 closed down 30.2 points, or 0.52 per cent, at 5,790.5 points, while the broader All Ordinaries index was down 27.6 points, or 0.47 per cent, at 5,901.4 points.
In economic news on Tuesday, ANZ releases its weekly consumer confidence survey.

US Markets

Technology stocks led Wall Street’s rebound on Monday as fears over a potential trade war were calmed following reports the US and China are willing to renegotiate tariffs and trade imbalances.
The rally comes on the heels last week’s losses by the three major stock indexes, which was their worst weekly performance since January 2016.
Last week’s drop was fuelled in part by tensions surrounding President Donald Trump’s move to levy tariffs on up to $US60 billion ($A77.5 billion) in Chinese imports, in addition to those imposed on solar panels, steel and aluminum.
But tensions eased as Chinese Premier Li Keqiang repeated pledges to maintain trade negotiations and ease access to American businesses.
“Over the weekend there was some indication that maybe the tariff deal with China was less onerous than previously thought,” said Bucky Hellwig, senior vice president at BB&T Wealth Management in Birmingham, Alabama.

Commodities

Gold swung between small gains and losses Monday before closing higher, lifted by a falling dollar despite stocks bouncing back on reports that the U.S. and China have quietly started negotiating to improve U.S. access to Chinese markets.
IRON ORE: $63.20 -0.79(April contract)

Oil Futures

Oil prices fell Monday after data showed that stockpiles rose at a key U.S. storage hub, but largely sustained robust gains from last week that have been driven by escalating geopolitical risks.
U.S. crude futures fell 33 cents, or 0.5%, to $65.55 a barrel on the New York Mercantile Exchange. Brent, the global benchmark, fell 33 cents, or 0.47%, to $70.12 a barrel on ICE Futures Europe.

Forex

The dollar fell Monday, as fears of a trade conflict between the U.S. and China receded.
The WSJ Dollar Index, which measures the U.S. currency against a basket of 16 others, was recently down 0.4% at 83.07.
The Wall Street Journal reported Sunday that China and the U.S. have started negotiating to improve U.S. access to mainland Chinese markets. The behind-the-scenes discussions came after announcements of U.S. plans to hit China with tariffs on as much as $60 billion in imports and other restrictions dampened investor appetite for a broad range of currencies.

Australian Dollar:
The Australian dollar is higher, as US stocks start to recover after their worst weekly performance since January 2016.
At 0635 AEDT on Monday, the local currency was worth 77.45 US cents, up from 77.21 US cents on Monday.

European Markets

British shares fell on Monday, reversing earlier gains and joining a broader pull-back in Europe where diplomatic tensions with Russia helped more than offset easing trade war fears.
The FTSE 100 fell 0.48 per cent to 6.888.7 points, its lowest closing level in 15 months and staying below the key 7,000 points mark for the third day running.
On the mainland, Germany’s DAX was down 0.8 per cent, while the French stock market fell 0.6 per cent.
The FTSE index had earlier risen as much as 0.5 per cent following a report that the US has contacted China seeking measures to reduce their trade imbalance.
Then the United States said it would expel 60 Russian diplomats, joining governments across Europe punishing the Kremlin for a nerve agent attack on a former Russian spy in Britain that they have blamed on Moscow.
Strength in the pound, which rose against the US dollar on growing confidence that the Bank of England would raise interest rates in May, also did not help.

Asian Markets

Asian shares were hammered again on Monday as fears of a trade war between the United States and China took their toll, but the safe haven yen came off its highs.
The United States agreed to exempt South Korea from steel tariffs, imposing instead a quota on steel imports as the two countries renegotiate their trade deal.
The positive headlines were little consolation for Asian shares which were left nursing their wounds.
Japan’s Nikkei trimmed early losses but were still down 0.7 percent. Chinese shares declined about 0.6 percent.
MSCI’s broadest index of Asia-Pacific shares outside Japan slipped 0.4 percent for its fourth consecutive day in the red.
The S&P/NZX 50 index on Monday fell 82.94 points, or 0.97 per cent, to 8,432.41.

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