Global Equities Flat Despite Disappointing Data, Chinese Regulators Curb Futures Speculating, ASX SPI200 Futures Down 47 Points

European equities were higher on Thursday with the DAX30 and FTSE100 up 0.24% and 0.09% respectively. This was despite weaker Markit Services & Composite PMI data for April, which showed that the UK continues to slow down prior to the June 23rd referendum. Services PMI for April was 52.3 vs 53.5 expected while the Composite PMI came in at 51.9 vs an expected level of 53.2.Over the Atlantic, and US initial jobless claims for April 30th was higher than forecast at 274,000 vs 260,000 expected while continuing claims for April 23rd was slightly lower than estimated at 2,121,000 vs 2,128,000, US Dollar traders will now shift their focus to the non-farm payrolls data out on Friday. The S&P500 & Nasdaq100 indexes finished relatively unchanged, down 0.02% and 0.06% respectively.  

Elsewhere, Australian data showed the trade balance shrunk more than forecast in March and retail sales (MoM) exceeded expectation of a 0.3% gain with a 0.4% reading. The AUDUSD closed 0.39% stronger while the ASX200 whipsawed higher and lower, eventually closing up 0.15%. Meanwhile Caixin Chinese PMI Services & Composite data for April slowed to 51.8 vs 52.2 prior and 50.8 vs 51.3 prior. The first chart below shows the technical levels for the ASX200 index, Global Investment Director Oliver Gordon notes that “Price is now pulling back following a test of key resistance between 5,305 and 5,384. Momentum indicators continue to suggest the price remains overbought, increasing the risk of a pause or pullback in the near-term towards support between 5,125 and 5,071 where we find the 50-day and 200-day moving averages converging”. Meanwhile the ASX200 is set to open weaker this morning with SPI200 futures down 47 points in overnight trading.  For those interesting in technical analysis and short term trading please contact 02 8302 3600 or info@rivkin.com.au to organise a free trial.

Following a recent high of US$70.60 a tonne, the iron ore price is beginning to move lower as a result of weaker than expected data out of China. Furthermore, Chinese regulators have recently stepped in to curb any potential bubble created by speculative “mom and pop” trading by increasing transaction costs and widening trading limits. This is having the desired effect as open interest has decreased which should result in lower volatility across broader commodity markets as a result.

Data Releases:

·         Reserve Bank of Australia Statement on Monetary Policy 11:30am AEST

·         Nikkei Services & Composite PMI (Apr) 12:00pm AEST

·         German Markit Construction PMI (Apr) 5:30pm AEST

·         German Markit Retail PMI (Apr) 6:10pm AEST

·         US Unemployment Rate & Non-farm Payrolls (Apr) 10:30pm AEST

·         Canadian Unemployment Rate (Apr) 10:30pm 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.