Global Equities Hold Modest Gains, Commodities Fall, Australian Dollar Testing Significant Support, ASX SPI200 Futures Down 16 Points

Monday was a quiet night on the data front, with no major economic releases of note to talk about, resulting in low volatility for equities. The DAX30 index lead the European markets higher, up 1.12% while the FTSE100 lagged behind, down -0.18%. US equities also finished higher following a session swinging between gains and losses closing up 0.08%, while the Nasdaq100 gained 0.26%. Gains in health-care and consumer staples offset energy shares dragged lower by commodity prices.

Commodity prices continued their recent declines from a combination of a stronger US Dollar, recent weaker Chinese data and a crack-down on speculative futures trading by Chinese exchanges. Iron Ore fell -5.66%, Copper -2.19%, Natural Gas -0.14%, while WTI & Brent Crude were down -2.73% & -3.19% respectively following Saudi Arabia’s replacement of Oil minister Ali al-Naimi over the weekend with state energy company Saudi Arabian Oil Co’s chairman, Khalid Al-Falih who believe Saudi Arabia needs to defend its market share and exports.

Locally, the ASX200 closed higher on Monday, up 0.54% at 5,320.70 meanwhile ASX SPI200 futures are down 16 points suggesting a weaker open this morning. It is set to be another quiet night for data however traders should be aware of Chinese CPI & PMI (YoY Apr) at 11:30am Sydney time which has the potential to have a significant impact on sentiment today.

Finally Australian Dollar closed -0.68% weaker on Monday to be currently down approximately 6.70% from its April high at 0.7835 following disappointing CPI data and revised CPI forecasts lower by the Reserve Bank of Australia. The chart below highlights that price has now moved into a significant support zone between 0.7385 and 0.7240 with momentum indicators at oversold extremes, suggesting there is the growing risk of a pause or bounce in the short-term. 


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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