Commodities at highest levels in four months, Oil gets bounce following renewed hope of output freeze talks, ASX SPI200 futures 36 points higher

It was a relatively quiet day for data on Wednesday with no real releases of note, European equity markets rose on Wednesday, ahead of the European Central Bank meeting on Thursday. The DAX30 rose 0.69%, the FTSE100 (+0.08%) and the CAC40 (0.56%) ahead of the meeting for which traders are pricing in only a 5.3% chance of a rate cut. U.S. equities finished little changed, with the S&P500 & Nasdaq100 indexes up 0.08% & 0.07% respectively on mixed earnings results while Hilary Clinton & Donald Trump both won their respective parties New York primary.

Commodity prices continued recent gains as oil moved higher following comments from Iraq’s oil minister that key OPEC and other oil producers may possibly meet again next month to further discuss an output freeze. Both Brent & WTI crude futures gained 4.02% & 3.77% respectively lifting copper futures (+0.65%), and iron ore (+3.05%) which is now at the highest level since June 2015 highlighted on the first chart below. While the outlook for commodities continues to improve following signs the Chinese economy is stabilizing and global monetary policy remains accommodative, to put the recent rally in perspective I have shown a second weekly chart of the Thomson Reuters equal weighted commodities index with prices still down roughly 40% from their 2011 high.

Australia equities are expected to open higher this morning, with ASX SPI200 up 36 points in overnight trading while the Australia dollar continues to trade around at the highest levels since June 2015, currently at 0.7797.

Data Releases:

·         U.K. Retail Sales (MoM & YoY Mar) 6:30pm AEST

·         ECB Rate Decision (Apr) 9:45pm AEST

·         U.S. Initial & Continuing Jobless Claims (Apr 16th & 9th) 10:30pm AEST

·         Euro-Zone Consumer Confidence (Apr) 12:00am AEST


 

Source: Rivkin, Bloomberg, Updata

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This article was written by James Woods - Global Investment Analyst, Rivkin Securities Pty Ltd. Enquiries can be made via info@rivkin.com.au or by phoning +612 8302 3600.

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