Tuesday: 6th March 2018 - Australian Market to Open Higher

OPENING CALL: The Australian market looks to open higher with SPI Futures up 56 points.

Australian stocks are expected to open higher after overseas markets recovered some of the losses made at the end of last week, on the back of US President Donald Trump’s announcement to impose hefty trade tariffs.
European investors shrugged off the inconclusive outcome of Italian elections to lift the Stoxx Europe 600 by more than 1%, but Italian banks fell amid populist support.
Oil prices settled higher Monday, tallying their largest single-session dollar and percentage gain in nearly three weeks, following a reported drop in crude stocks at theU.S. storage hub in Cushing, Okla.

Overnight Summary


Market Quotes by TradingView

Each Market In Focus

Australian Market

Australian stocks are expected to open higher after overseas markets recovered some of the losses made at the end of last week, on the back of US President Donald Trump’s announcement to impose hefty trade tariffs.
At 7:00am AEDT on Tuesday, the share price futures index was up 61 points, or 1.04 percent, at 5,945.
Australian stocks extended losses into a 4th straight session, the longest losing streak in 6 weeks, as equities across the region continued to pull back. Led by losses among the major banks and miners, the S&P/ASX 200 fell 0.6% to 5895–off the day’s low after a late tick higher. Telecom and healthcare stocks were among the few to buck the trend.
Rare-earths miner Lynas rallied 4.8% on a return to profit in F1H while Magellan Financial gained 0.4% on new fund inflows picked up in February.

US Markets

The Dow Jones Industrial Average jumped Monday, putting the blue-chip index on track for its first gain in five trading sessions, as investors’ fears that Trump administration’s plan to impose stiff import tariffs could spark an all-out trade war eased.
Several investors said the threat of a trade war over planned tariffs on steel and aluminum imports diminished slightly, as administration officials, including Commerce Secretary Wilbur Ross, downplayed concerns on Sunday’s television talk shows. House Speaker Paul Ryan also broke with Mr. Trump over his decision to impose tariffs on imported steel and aluminum products, warning the White House on Monday to drop the plan.

Commodities

Gold prices swung between small gains and losses before closing lower Monday, as commodities investors continued tracking moves in the dollar.
Front-month gold for March delivery closed down 0.2% at $1,318.10 a troy ounce on the Comex division of the New York Mercantile Exchange. Prices surged on Friday with the dollar falling and some investors rushing to safer assets after the Trump administration
announced tariffs on steel and aluminum that some analysts think could threaten the stock-market rally. Some investors favor gold when they think markets might turn rocky.
However, a stronger dollar makes gold and other dollar-denominated commodities more expensive for overseas buyers. Some analysts think the dollar rebounding from multiyear lows has prevented gold from rallying even with increased market volatility. The WSJ Dollar Index, which tracks the U.S. currency against a basket of 16 others, rose 0.1%
Monday.
Among base metals, front-month copper for March delivery was also little changed and closed down 0.1% at $3.1055 a pound. Prices have fallen this year after hitting a roughly four-year high in late December, with some investors concerned about oversupply and a
slowdown in the Chinese economy. China is the world’s largest consumer of industrial metals.

Oil Futures

Oil prices settled higher Monday, tallying their largest single-session dollar and percentage gain in nearly three weeks, following a reported drop in crude stocks at the U.S. storage hub in Cushing, Okla.

Forex

The dollar rose against the currencies of Mexico and Canada, as investors continued to weigh the repercussions of looming global trade conflicts.
The dollar was recently up 0.7% at 1.2971 against the Canadian dollar, its highest level since last July. It gained 0.4% to 18.90 against the Mexican peso.
President Donald Trump on Monday increased pressure on the two U.S. trading partners, saying he would lift planned tariffs on steel imports only if Mexico and Canada sign a new version of the North American Free Trade Agreement, or Nafta.
Both countries depend heavily on exports to the U.S., making their currencies sensitive to potential changes in their trade status.
A broader measure of the U.S. currency showed the dollar little changed against a basket of its peers. The Wall Street Journal Dollar Index, which gauges the U.S. currency against a basket of 16 others, was recently up 0.1% at 83.79.

European Markets

European investors shrugged off the inconclusive outcome of Italian elections to lift the Stoxx Europe 600 by more than 1%, but Italian banks fell amid populist support. The pan-European index gained 3.83 points to 370.87 after German semiconductor maker Siltronic’s shares rose 7.6%, following increased profits in 2017 and forecasts for an upbeat 2018. Meanwhile, Italian banks slid after national polls indicated a surge in
support for Italian populists.

Asian Markets

In Asia, most markets fell on concerns about the potential impact of tariffs on global trade.
Hong Kong’s Hang Seng Index fell 2.3%, while the Nikkei Stock Average shed 0.7%, with metals-related stocks extending declines on concerns about a U.S.-led global trade war.
Earlier Monday, China’s government said its 2018 economic-growth target would remain around 6.5% as it predicted a reduced budget deficit. It also said it would cut excess capacity in the steel sector by 30 million metric tons and by 150 million in coal.

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