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Home / Business / ASX poised to lower open, Wall St slips, US oil enters bear market

ASX poised to lower open, Wall St slips, US oil enters bear market



Australian stock futures are lower as investors wait for the RBA to get guidance on the outlook for the tariffs. ASX futures fell 11 points to 8 AEDT. Wall St was ready to end modestly lower. US oil entered a bear market.

The RBA will publish this latest statement on monetary policy this morning, and is expected to confirm the optimism of the bank's outlook. The bank at the beginning of this week made small upward revisions to economic growth and inflation expectations, as well as a slight downward revision of the unemployment rate

"It is also difficult to see the AUD draw further momentum from today's "Statement by the RBA, Director of the NAB Economy, David de Garis," he said in a morning note.

"The post-council Tuesday press release has revealed their updates to economic growth for this year and the next year from 3¼% to 3½% and an almost mandatory cut to the medium-term unemployment rate at 4¾ % for 2020 from 5-5¼%, given that unemployment is already at 5%, "said de Garis. "While the RBA has improved growth prospects, they too have noticed uncertainty about the prospects for consumption and concerns of the real estate market, something on which the market and commentators are well tuned: 1

9659005] Shares on Wall Street has extended the modest losses towards the closure after the Federal Reserve has said that the politicians vote to maintain constant interest rates and has declared that the continuous gains of work and the expenditure of the families have maintained the economy on track.

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"As universally anticipated, the Fed left the rates pending today and there was nothing in the political statement suggesting that officials are hesitating from their plans to raise interest rates in December, "Capital Economics" by Michael Pearce

"The focus was on the small change to the post-r statement iunion that, if nothing else, was slightly accommodating, "said Pearce.

Mr. Pearce said that the growth of corporate fixed investment, which was previously described as "strong", was noted as "moderated by its rapid pace at the start of the year", a nod to the sharp slowdown in investment revealed in the third quarter GDP figures. "But with the job gains and the overall economic activity still described as growing at a" strong "rate and inflation in line with its goal, this will not be enough to stop hiking. of the Fed. "

Capital Economics bets on a December hike rate and another two increases in 2019.

TD Securities said that the "risks remain" approximately balanced, keeping the Fed on track for another rate hike in December, at our notice. "

The tariff markets already had a price of 95 Cen also said that the price is widely fair in the current economic situation, also said TD.

Oil in New York fell into a bear market , adding pressure on OPEC and its December increase, allies to cut production a few months after the addition of barrels.

Futures plummeted by 1.6 percent, extending a decline from the high of October to more than 20 percent, satisfying the common definition of bear market.An inventory build-up quicker than expected threw speculator hopes that prices could reach $ US100. US crude production has accelerated to new records, OPEC production is at most years and derogations will allow Iranian crude to flow in the market despite US sanctions.

"Sentiment has changed" Bart Melek, head of Global commodity strategy at TD Securities in Toronto, said in Bloomberg. "OPEC has taken on more rough than we thought, and secondly, these exemptions are becoming an impediment to price support."

West Texas Intermediate crude futures for December delivery dropped $ US1 to $ 60.67 per barrel in the New York Stock Exchange, the lowest level since March. Futures fell for a ninth consecutive day, the longest series of losses since 2014. The WTI stood at $ US76.41 a barrel on 3 October.

Technical indicators signal a rebound could come soon, with the relative strength index of 14 days below 30, a level that signals that the market is oversold.

Today's agenda

Local Data: RBA Statement on Monetary Policy at 11.30 am AEDT, Housing Finance September

Data for Foreign Countries: China October PPI and CPI; Third-quarter GDP in the United Kingdom, industrial production in September; US PPI Final October, Consumer Sentiment of the University of Michigan November

Market Issues

SPI Futures down 11 points or from 0.2% to 5902 around 8:00 AEDT

AUD -0.3% to 72.54 US cents (Night peak 73.02) [19659002] On Wall Street around 16.00: Dow -0.1% S & P 500 -0.5% Nasdaq -0.7 %

In New York, BHP -1.7% Rio -0.5% Atlassian -2.3%

In Europe: Stoxx 50 -0.2% FTSE + 0.3% CAC -0.1 % DAX -0.5%

Gold spot -0.1% to $ US1224.82 one ounce at 13:35 New York

Brent crude -1.5% to $ US71.01 a barrel

US oil -1.3% to $ US60.89 per barrel

iron ore + 1.3% to $ US76.27 per ton

Dalian iron ore + 1.4% to 522 yuan [19659002] LME aluminum + 0.3% to $ US1990 a ton

LME flat copper to $ US6155 a ton

2 year yield: USA 2.97% Australia 2.07%

5 year yield: US 3.09% Australia 2.30%

yield a 10 years: USA 3.24% Australia 2.75% Germany 0.45%

US-Australia 10-year yield rate around 8.00 AEDT: 49 basis points [19659018] From today's Financial Review

Banks reject Hayne's reform ideas: the four big banks have launched a strident defense of vertical integration, lending benchmarks and executive bonuses, in response to the Hayne Royal Commission interim report.

negative exchange rate: Bill Shorten quickly locked up on his plans to stop the negative gears. Scott Morrison states that it will cost Australia its AAA credit rating

Iron woman: meet Fortescue's Elizabeth Gaines: While Fortescue strives to produce superior quality iron ore and reduce price penalties, the CEO Elizabeth Gaines aims to push the mining industry

United States

The Fed holds, states that the economy is on track: the US Federal Reserve has kept interest rates stable and stated that continued job gains and household expenses have kept the economy on track.

Telstra CFO Robyn Denholm president of Tesla: Robyn Denholm, chief financial officer of Telstra, leaves the telecommunications giant to replace Elon Musk as president of Tesla.

The S & P 500 slightly reduced losses and the Dow became negative on Thursday afternoon after the US Federal Reserve La Reserve said it would keep interest rates stable in a statement after its meeting two days.

"What the statement generally reports is that they are still on track or raising rates." December is in the plan and they see no reason to slow or stop the rate hike, "said Brad McMillan, Chief Investment Officer of Commonwealth Financial Network, an independent broker-dealer in Waltham, Mass.

"This is very much in line with what the market was expecting." I see the market today moving away from strong gains Yesterday, there is no real news in the statement. "

The S & P Bank index canceled its gains and turned negative after bank profits benefited from rising rates.

Europe

European equities have been slightly upwards on Thursday The positive results of Société Générale, Commerzbank and Sodexo have mitigated concerns about corporate earnings

The pan-European STOXX 600 has increased by 0.2 % from the closee.In early trading, the index has reached its highest since 10 October [19659002] The main index of euro area shares closed 0.3 percent, however, with the German DAX in decline of 0.5% and the CAC of France down by 0.1.1%

The shares of the third bank in Italy Banco BPM rose by 8.9 per cent, then it equalized the gains to close 2.6 percent more, after the third quarter net profit exceeded forecasts thanks to lower costs and a sale of assets that helped offset flat fees and lower interest rates.

Commerzbank and SocGen increased 5.2 percent and 2.4 pe

Investors have shrugged off the news that UBS, the largest Swiss bank, faces another potentially costly legal battle, while the US Department of Justice is processing civilian expenses for the sale of mortgage-backed securities in the run until the financial crisis of 2008.

The bank has stated that it will vigorously contest any claims.

Analysts at Zuercher Kantonalbank calculated over half of the CHF 1.2 billion that UBS has allocated for non-core legal risks.

Asia

The Hang Seng index closed up 0.3 percent to 26,227.72 points, while the China Enterprises index gained 0.6 percent, 10,703.59 points.

Work with us, China urges Australia: China has urged Australia to work with it, not against it, in funding regional infrastructure, after Scott Morrison announced 3 billion dollars in loans and subsidies for the South-Wes t Pacific.

Now the influence of China's money becomes a new sensibility – The AFR View: Australia is rejecting Chinese money in the Pacific islands and keeping it out of our sensitive infrastructure.

Around the region, MSCI Asia's Japanese equity index was 0.6% more stable, while the Japanese Nikkei index closed 1 & apos;, 8%.

All but one of the 33 Topix sub-sectors were in positive territory. The broader Topix rose by 1.7 percent to 1681.25. The advanced problems are down compared to those falling from 1733 to 324.

Toshiba rose 13% to a maximum of two years and recorded the highest daily gain since July 2017 after the company liquidated its plant British nuclear and sold the United States liquefied natural gas business (LNG).

The company also announced a plan to repurchase up to 40% of its shares.

Currencies

The Fed holds, states that the economy on track: the US Federal Reserve held constant interest rates and strong labor and household spending have kept the economy on track.

Larry Fink fights the battle of solitary deficits: while Americans were watching medium-term results this week, Larry Fink was halfway across the world to warn of the country's dangerous financial situation.

Consolidated gains in pounds sterling after a three-day rally, such as a dollar rebound and hopes of an imminent Brexit agreement have prompted investors to make profits.

Against a US dollar recovering, the pound fell 0.2 percent to $ US1.3106, below the two-week high of $ US, 3176 on Wednesday. It traded substantially flat against the euro at 87.01 pence.

"The FX market still seems to hope for a friendly deal, as a look at volatility shows that it remains fairly relaxed until March 2019," said Antje Praefcke, a currency analyst at Commerzbank. "However, prompt caution: there is still resistance within the British government," he added.

Commodities

Copper rose on Thursday as traders weighed an increase in the dollar and a decline in Chinese metal imports compared to improvement Chinese growth prospects

China, which consumes almost half of world copper , recorded a 19% monthly drop in copper imports in October, according to data. The decline was partly linked to the impact of the holidays.

The three-month copper on the London Metal Exchange closed flat at $ US6155 per tonne, while aluminum closed 0.3 percent upward to $ US1,990.

expect relatively high refined copper imports in the fourth quarter because import arbitrage has been widely opened, "said Colin Hamilton, head of commodity research at BMO Capital Markets.

Japanese Sumitomo has cut profit forecasts for the whole year, blaming lower than expected metal prices, reduced nickel production and US-Sino trade conflict

After falling 1.5 percent to 3878 yuan / ton – the lowest since July 27 – January's most active rebar on the Shanghai Futures Exchange closed 1.2 percent to 3986 yuan.

Mills are increasing steel production while profits they remain strong, pushing more supply on the market, said an iron ore merchant in Shanghai. "Some market players are already looking at a weaker steel market the next year, "he said.

The China Iron and Steel Association data showed that average daily crude steel production at its member factories was 1.97 million tonnes in October 1-20, almost corresponding to 1.98 million millions of tons in September

Australian Sharemarket

Fidelity sold Corporate Travel after the price gains: the manager Fidelity International has exhausted the short-selling objective of Corporate Travel Management, after a period of strong performance of the stock price from the fast -growing stock.

Thursday, Australian shares have risen to a maximum of three weeks. The S & P / ASX 200 benchmark index closed 31.3 points, or 0.5% more at 5928.2.

Most major banks were among the market leaders on Thursday despite the APRA announcements that would increase the total capital required by the four major banks by 4 to 5 percentage points of risk-weighted assets within five years.

NAB was the only major bank to fall while trading the ex-dividend, closing the session of 3.6% to $ 24.93.

Street Talk

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AMA Manikin of group crash test for "friendly" activism

Private equity hungry for an agreement with supporters of Meat & Wine Co

with Reuters, Bloomberg, AAP

Comments? Questions? Let us know what you think of Before the Bell: timothy.moore@fairfaxmedia.com.au


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