Wednesday: 28th February 2018

OPENING CALL: The Australian market looks to open lower with SPI Futures down 35 points.

The Australian share market looks set to follow the global trend and open sharply lower.
US stocks have fallen sharply after Federal Reserve chair Jerome Powell’s comments on strengthening economy and inflation boosted bets the central bank would squeeze in a fourth rate hike this year.

The Australian dollar is nearly half a per cent lower against its US counterpart after new Federal Reserve chair Jerome Powell’s congressional testimony sends the greenback higher.

Overnight Summary


Market Quotes by TradingView

Each Market In Focus

Australian Market

The Australian share market looks set to follow the global trend and open sharply lower.
At 0700 AEDT on Wednesday, the share price futures index was down 35 points, or 0.58 per cent, at 6,001.
In economic news on Wednesday, the Reserve Bank of Australia is due to release financial aggregates figures.
In equities news, Harvey Norman, Noni B, Bega Cheese, Virgin Australia, Retail Food Group, Ramsay Health Care, Bubs Australia and Adelaide Brighton are expected to release earnings report.
The Australian market on Tuesday rose for a fifth straight session as positive offshore leads contributed to gains for miners and banks.
The benchmark S&P/ASX200 index gained 14.7 points, or 0.24 per cent, to 6,056.9 points, while the broader All Ordinaries index rose 13.2 points, or 0.21 per cent, to 6,159.3 points.

US Markets

US stocks have fallen sharply after Federal Reserve chair Jerome Powell’s comments on strengthening economy and inflation boosted bets the central bank would squeeze in a fourth rate hike this year.
In his prepared remarks, Powell had hinted that the central bank would stick to its current path of gradual rate hikes, but his comments during a congressional testimony that recent data increased his confidence in rising inflation spooked the market.
The benchmark US 10-year Treasury yields rose to a session high of 2.919 per cent, and the US dollar rose.
The CBOE Volatility index, better known as Wall Street’s fear gauge, jumped to 17.36 points, posting it biggest gain in more than two weeks.
At 12:30 p.m. ET, the Dow Jones Industrial Average was down 0.42 per cent at 25,601.84. The S&P 500 fell 0.63 per cent to 2,761.95 and the Nasdaq Composite dropped 0.84 per cent to 7,359.46.

Commodities

Gold prices fell, hurt by a stronger dollar as investors monitored congressional testimony from new Federal Reserve Chairman Jerome Powell.
IRON ORE: $78.40 -0.29(March contract)

Oil Futures

Oil prices suffered a decline from three-week highs, pressured by expectations for a weekly build in U.S. crude stockpiles and concerns over growth in domestic production.
Strength in the U.S. dollar, in the wake of Federal Reserve Chairman Jerome Powell’s first day of congressional testimony, also put pressure on dollar-denominated prices of oil.

Forex

The dollar rose to its highest level in two weeks intraday, after Federal Reserve Chairman Jerome Powell said the U.S. economic outlook remains bright amid strengthening growth and inflation.
The ICE Dollar Index, which measures the U.S. currency against a basket of six others, was recently up 0.6% at 90.41, its highest level since mid-February.
Speaking before Congress, Mr. Powell conveyed an upbeat picture of the U.S. economy expanding at a solid clip. The strong job market will help consumer spending and businesses will feel more confident about investing, which should boost productivity, he said.
Australian Dollar
The Australian share market looks set to follow the global trend and open sharply lower.
At 0700 AEDT on Wednesday, the share price futures index was down 24 points, or 0.40 per cent, at 6,012.

European Markets

M&A activity spiced up a choppy European trading session on Tuesday as Comcast made a surprise counterbid for pay-TV group Sky, sending its shares soaring.
The pan-European STOXX 600 closed down 0.2 per cent at 382.26 points.
Shares in Sky jumped more than 20.5 per cent on the back of Comcast’s $US31 billion offer, which could scupper Fox’s plan to buy out Sky and sell it to Walt Disney.
That takeover has already been delayed by concerns for media plurality in Britain and whether Murdoch would be a “fit and proper” owner of such an important broadcaster.
Sky shares were trading well above Comcast’s offer price, suggesting some investors expect Fox/Disney to come back with a higher offer.
Germany’s DAX fell 0.29 per cent to close at 12,490.73.

Asian Markets

Asian shares extended their recovery on Tuesday, hitting a three-week high as US borrowing costs eased ahead of the Fed chair’s highly-anticipated first congressional testimony later in the day, before China markets turned lower.
MSCI’s broadest index of Asia-Pacific shares outside Japan rose 0.5 per cent, building on its bounce from a two-month low touched on February 9.
It has now recouped more than 60 per cent of its losses from a sharp global rout in early February.
Japan’s Nikkei rose 1.07 per cent to 22,389.86, a three-week high.
China stocks ending up snapping a six-session winning streak, led lower by real estate and resource firms, as investors booked profits after a recent strong rally.
Market participants continued to ponder the impact of certain amendments in the wording of China’s constitution.
China’s ruling Communist Party on Sunday set the stage for President Xi Jinping to stay in office indefinitely, with a proposal to remove a constitutional clause limiting presidential service to just two terms in office.
Hong Kong’s Hang Seng closed 0.73 per cent lower at 31,268.66.
The Shanghai Composite Index closed down 1.13 per cent at 3,292.07, while the blue-chip CSI300 index lost 1.44 per cent to 4,058.98.
The S&P/NZX 50 index increased 0.4 per cent, to 8,370.07.

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