Global Equities Lower On Mixed Data, Commodities Continue Rally, AUD Resilient Ahead of RBA & Federal Budget, ASX SPI200 Futures 6 Points Lower

Global equity markets were lower on Friday as a result of mixed economic data. Euro-Zone CPI (YoY Apr) came in less than forecast with a reading of -0.2% vs -0.1% expected while other data showed Euro-Zone GDP increased more than expected (QoQ) 0.6% vs 0.4% expected. European equity indexes were broadly lower, the DAX30 (-2.73%), CAC40 (-2.82%), Euro Stoxx 50 (-3.11) and the FTSE100 (-1.27%). US equities followed the European session lower amid mixed earnings and data that showed consumer spending in March came in lower than expected, the S&P500 (0.51%) and Nasdaq100 (-0.52%).

The US Dollar index continued a four month decline, finishing 0.72% lower on Friday helping to boost commodities and precious metals. Iron Ore (+5.31%), Copper (+2.07%), Natural Gas (+4.81%), WTI Crude (-0.29%), Brent Crude (-0.02%), Spot Gold (+2.15%) and Spot Silver (+1.66%). The first chart below shows the Thomas Reuters continuous commodity index now around the highest levels since October 2015, after putting in a significant low in January the index has rallied over 50% suggesting this is more than a bear market rally.

Looking to the local market the ASX200 closed higher on Friday, up 0.51% at 5,252, meanwhile ASX SPI200 futures are down 6 points suggesting a slightly weaker open this morning. Tuesday is a very important day this week, with the Reserve Bank of Australia rate decision at 2:30pm for which the market is currently pricing in a 55% chance of a rate cut to 1.75%. The second chart below shows the Australia Dollar which is trading somewhat resiliently ahead of the decision. Another factor on Tuesday that is likely to move the dollar is the Government budget where there are forecasts for policies including tax concessions for high-income earners savings for retirement, minimizing tax for multinational companies and raise the bracket for when a 37% personal income tax kicks in.

Data Releases:

·         TD Securities Inflation (YoY Apr) 11:00am AEST

·         NAB Business Confidence (Apr) 11:30am AEST

·         US ISM Manufacturing (Apr) 12:00am AEST



Source: Rivkin, Bloomberg, Updata

To view the Rivkin economic calendar and Global Markets matrix, members can click here.

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.

Complex product warning

This article contains information about foreign exchange contracts, which are considered complex financial products. Please click here to read ASIC's foreign exchange trading article before considering an investment in foreign exchange contracts. 

This article contains information about CFDs, which are considered complex financial products. Please click here to read ASIC's "Thinking of trading contracts for difference?" document before considering an investment in CFDs.
comments powered by Disqus

DISCLAIMER: Rivkin aims to provide clear and simple information to those visiting our website. If any part of this disclaimer does not make sense, please phone Rivkin and ask to speak with a member of our Dealing and Relationship Management Team. Rivkin provides general advice and dealing services on securities, derivatives and superannuation (SMSF). Rivkin also provide SMSF administration and accounting services. Rivkin does not provide advice that takes into account your, or anybody else's, investment objectives, financial situation or needs. We strongly suggest that you consult an independent, licenced financial advisor before acting upon any information contained on this website. Investing in and trading securities (such as shares listed on the ASX) and/or derivatives (such as Contracts for Difference or 'CFDs') carry financial risks. CFDs carry with them various additional risks that differ from more simple securities such as fully-paid company shares. Some of these risks include not owning the underlying instrument from which a price is being derived, settling trades 'over the counter' with a financial institution rather than on a stock exchange, and using leverage to gain access to trades that may have a higher face value than your initial deposit. This risk of leverage means that it is possible to lose more than your initial investment. Our aim is to create more life choices for our clients, which means improving the wealth of clients throughout many market cycles by nurturing a relationship spanning many years. If you are not comfortable with your understanding of the risks involved before using a Rivkin product and service, please contact our office to seek further information or a Product Disclosure Statement, or make an appointment to sit with one of our friendly financial experts. It is in our interest for your Rivkin experience to be a rewarding and comfortable one. Rivkin is a trading name of Rivkin Securities ABN 87123290602, which holds Australian Financial Services Licence No. 332 802.