ASX is expected to open flat on Monday despite the political turmoil Australia had over Friday changing of PM. This is supported by a strong closes across all major markets in US & Europe.
In US, Wall Street closed at a fresh record with Dow Jones closed up 0.5%, S & P up 0.6% & Nasdaq up 0.9%. In Europe, FTSE closed up 0.2%, DAX up 0.2% & CAC closed up 0.2%. In Commodities, Gold traded higher up by 1.7% at US $1205.35 & Iron Ore up 1.3% to US $67.03 a tonne. Australia dollar also rebounded after PM Morrison was confirmed to replace outgoing PM Turnbull. AUDUSD supported by stronger commodities prices currently trading at US $0.73324 cents.
US 10 year Treasury yield fell 2.81% on the back of the speech made by Federal Reserve Gov Powell that interest rate rises would not be as urgent as previously expected. Despite the strength of US’s economy is not deemed as over heating and the current anchoring of long term inflation expectations meant that policy can be a bit more accommodative than if policymakers had to offset a rise in longer-term expectations.
Not much is happening in terms of major numbers coming out this week. Investors will continue to focus on the reshuffle of Australia’s Minster Cabinets and in overseas, talks in Washington between US & China has little success. Looming instead are new tariffs that Trump has threatened to impose on some $US200 billion in annual imports from China. The market will be facing an escalating trade war over the next few months.
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DATA RELEASES THIS WEEK:
USD – Prelim GDP q/q
USD – Crude Oil Inventories
NZD – ANZ Business Confidence
AUD – Private Capital Expenditure q/q
CAD – GDP m/m
CNY – Manufacturing PMI & Non-Manufacturing PMI
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