Thursday: 5th July 2018

OPENING CALL: The Australian market looks to open higher with SPI Futures up 12 points.

Australian shares look set to open higher despite European markets being down and Wall Street being closed for a public holiday.

U.S. markets were to remain closed Wednesday for the July 4 Independence Day holiday.

Overnight Summary


Market Quotes by TradingView

Each Market In Focus

Australian Market

Australian shares look set to open higher despite European markets being down and Wall Street being closed for a public holiday.
In futures trading, the SPI200 futures contract was up 12 points, or 0.2 per cent, to 6,149 points at 0730 AEST, pointing to a higher open for the Australian stock market on Wednesday.
Morning weakness in Australian stocks wasn’t reversed in the afternoon, resulting in the S&P/ASX 200 giving up most of its rebound from Wednesday amid another day of broad Asia Pacific selling outside of Southeast Asia.
The index, now down seven of the past nine sessions, fell 0.4% to 6183.4 with broad declines. Utilities and telecom were the only sectors higher, the latter helped by Telstra rebounding for a third day.
Meanwhile, the heavily weighted bank sector was soft. IG said the ASX 200’s break below support at 6190 opens the prospect of a further drop to 6140.

US Markets

U.S. markets were to remain closed Wednesday for the July 4 Independence Day holiday.
In the final hour of trading Tuesday, U.S. stocks were dragged lower by a fall in technology stocks, after a Chinese court temporarily banned U.S. firm Micron Technology from selling chips in the country.
This came only one day after the U.S. moved to block China Mobile — the world’s biggest mobile operator in subscribers — from entering the U.S. market, citing national security concerns.
Shares in Micron closed down 5.5% Tuesday.

Commodities

London spot-gold prices rose further in Asia after Tuesday’s bounce that was helped by a weaker dollar. The greenback was down slightly further in the morning as forex finally gave gold a break. Spot gold was up 0.5% at $1,258.40.

IRON ORE: $64.24s + 0.16 (August contract)

Oil Futures

Brent crude edged up on supply problems in Libya, with the recent output issues expected to take some time to resolve.
Brent crude, the global oil benchmark, was up 0.1% to $77.87 a barrel on London’s ICE Futures exchange, near a more than three-year high of $80.50 hit in May. On the New York Mercantile Exchange, West Texas Intermediate futures were trading down 0.3% at $73.83 a barrel.
Earlier this week, Libya’s National Oil declared force majeure on loadings from some of its ports after a military faction stopped vessels entering the ports. Up to 850,000 barrels a day of supply has been shut in.
Oil prices have risen around 3% over the past two weeks in light of falling global inventories and the belief that the decision by the Organization of the Petroleum Exporting Countries to pump more oil wasn’t enough to offset falls in production expected from Iran and Venezuela.
Brokerage PVM estimated the combined impact of the Libyan supply issues, sanctions curbing Iranian output later in the year and the continuation of falling output from Venezuela could remove more than 2 million barrels a day of production from May levels.

Forex

Sterling rose after U.K. services PMI shows an increase to 55.1 in June from 54 in May, but gains were limited, given that Brexit-related issues, such as labour shortages, were identified in the report.
Brexit uncertainties are still leaving investors wary of buying the currency, even though services make up the majority of the U.K.’s gross domestic product. GBP/USD rose to 1.3206, from 1.3175 before the report was released, and EUR/GBP fell to 0.8817, from 0.8839 beforehand.

European Markets

The Stoxx Europe closed up 0.1% at 380.05, with equity trading muted due to trade tensions and as U.S. markets closed for Independence Day.
Trade concerns hurt German stocks, with the DAX index ending down 0.3%, while the U.K.’s FTSE 100 also closed down 0.3% as heavyweight mining stocks fell, mirroring a drop in base-metal prices.
Shares of France’s Casino Guichard-Perrachon led pan-European risers, however, up 5.8% after Goldman Sachs announced the purchase of a 5.18% stake in the French retailer. That helped France’s CAC 40 end just in the green, up 0.1%, while Spain’s Ibex was up 1%. But Italy’s FTSE MIB finished down 0.4%.

Asian Markets

Stock markets in Asia edged down, as spats between the U.S. and China related to trade and technology firms continue to dampen investors’ mood. Hong Kong’s Hang Seng was down 1.1% and the Shanghai Composite shed 1%. Japan’s Nikkei Stock Average closed down 0.3%.
China Mobile edged up 0.2%, after hitting a four-year low the previous day. The tussle over tech firms is only part of the continuing tensions between the U.S. and China, which has sparked concerns about a broader trade war among money managers. A first round of U.S. tariffs imposed on Chinese goods is set to come into effect Friday.
So far, Asian and European stock markets have been the hardest-hit by the U.S. administration’s move toward greater protectionism. This adds to signs that the pace of economic growth may have already peaked outside of the U.S., leading investors to push further back the time at which they expect other central banks to follow the Federal Reserve’s path and start tightening monetary policy.

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