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 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 or by phoning +612 8302 3600.

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