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The Experts

James
Craig James
Economy Expert
+ About Craig James
About Craig James

Craig James is CommSec’s Chief Economist.

On leaving school Craig James joined the (then) Rural Bank, whilst undertaking university studies. He received his Bachelor of Commerce (Economics) at University of NSW in 1984 and then a Master of Commerce (Economics) at the same university in 1988.

He remained at the Rural Bank, which became the State Bank over time and then Colonial, working in branches, Corporate, Planning and Economic Research.

He became chief economist of Colonial Group in September 1987, before becoming chief economist at CommSec in August 2000 with the Commonwealth takeover of Colonial.

In 2002 Craig had a sea-change, joining the Australian Financial Review. He had always wanted to pursue a role in journalism and enjoyed the role as an economic commentator and analysts, finding that he could pursue a journalistic-type role as well as doing more electronic media work at CommSec and rejoined the group in 2003.

On taking the reigns of chief economist at Colonial, Craig endeavoured to style their research in a “user-friendly” way – something that set their research apart and still does today. The approach has been successful in their media work and in promoting Colonial, and then CommSec, to the general public. CommSec is the most quoted economic group in the mainstream media.

CommSec economic reports are a bit different in that they devise tools such as the ‘Mums and Dads’ share index and the iPod index, and undertake research on the weather and demographic changes to show how they affect the economy.

Craig currently does around 2-3 regular TV crosses a day, ad hoc radio and newspaper interviews and writes regular commentaries as well as presenting to staff, clients and external organisations.

Outside work, Craig's main interests are athletics (cross country in winter), weight training, reading widely across a range of newspapers, magazines and electronic media, and trying to keep up with the children.

Good morning, Australia

Monday, February 11, 2019

Howd’y USA

Reuters reported that US Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin will travel to Beijing for principal-level meetings on trade over February 14-15 according to a White House statement. US sharemarkets ended mixed on Friday. Shares of Coty, Mattel and Motorola lifted after earnings results. Shares in videogame publisher Electronic Arts rose 16.05% after it said that its game Apex Legends had attracted 10 million players in three days. At the close the Dow Jones index was down by 63 points or 0.3%. But the S&P500 index was up by 0.1%. And the Nasdaq index was higher by 10 points or 0.1%. Over the week the Dow rose by 0.2% with the S&P 500 up by 0.1% and the Nasdaq gained 0.5%. US treasuries were firmer on Friday (yields lower). US 2-year yields fell by 2 points to 2.47% and US 10-year yields fell 3 points to 2.63%. Over the week US 2-year yields fell by 4 points and US 10- year yields fell by 5 points. Major currencies were mixed against the US dollar in US and European trade compared with the Asia close. The Euro fell from highs near US$1.1350 to US$1.1320 and was near US$1.1325 in late US trade. The Aussie dollar rose from lows near US70.70 cents to highs near US71.00 cents and was near US70.90 cents in late US trade. And the Japanese yen lifted from 109.89 yen per US dollar to JPY109.66 and was near JPY109.72 in late US trade.

Global oil prices rose modestly on Friday. Investors were reluctant to take fresh positions ahead of US-China trade talks. The number of oil rigs in operation in the US rose by 7 to 854 in the past week. Reuters reported that US lawmakers advanced a bill known as the No Oil Producing and Exporting Cartels Act, or NOPEC, in the House of Representatives. The bill could target OPEC producers for anti-trust behaviour. Brent crude rose by US39 cents or 0.6% to US$62.02 a barrel and the US Nymex price rose by US8 cents or 0.2% to US$52.72 a barrel. Over the week Brent fell by 1.2% and Nymex fell by 4.6%.

Bonjour, Europe

European sharemarkets fell on Friday. The pan-European STOXX600 index fell by 0.6% on Friday and fell 0.4% for the week - the first weekly decline in five weeks. The autos sector lost 2.2%. But shares in cosmetics maker L'Oreal rose 1.3% and shares in luxury handbag maker Hermes rose 1.5% on reporting better than feared demand from China. The German Dax index fell by 1.1% while the UK FTSE lost 0.3%. In London trade, shares of both Rio Tinto and BHP ended flat over the session.

Top of the morning, London

Base metal prices were mixed on the London Metal Exchange on Friday. Tin and lead rose by up to 0.5% while other metals fell by up to 3.2% with nickel down the most and other metals fell by 0.6-0.8%. Over the week zinc fell 3.1% and lead fell 2.5% but copper rose by 1.2% with tin up 0.5%. The gold futures price rose by US$4.30 an ounce or 0.3% to $1,318.50 an ounce. The spot gold price was near US$1,314 an ounce in late US trade. Over the week gold fell by US$3.60 or 0.3%. Iron ore rose by US$3.70 or 4.1% to US$94.20 a tonne. Over the week iron ore rose by US$7.20 or 8.3%.

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A mixed bag of data and events next week!

Friday, February 08, 2019

The week kicks off on Tuesday, when the Australian Bureau of Statistics (ABS) releases the new publication, Lending to Households & Businesses. The data includes all new lending commitments and may show further softening of home loan demand. And the January business survey will be issued from National Australia Bank. There was a pronounced softening of conditions and subdued reading on sentiment in the December survey. The business conditions index fell from +10.6 points in November to four-year lows of +2.2 points in December. The long-term average is +5.8 points. The NAB business confidence index eased slightly from +3.4 points to near three-year lows of +2.8 points in December, below the long-term average of 6.0 points. The weekly reading of consumer confidence is also issued Tuesday with Reserve Bank figures on credit and debit card lending. 

On Wednesday

Reserve Bank Head of the Economic Analysis Department, Alexandra Heath, delivers remarks at the Australian Business Economists Forecasting Conference. And the Westpac/Melbourne Institute monthly survey of consumer confidence. This report is more of a “check” on the weekly consumer sentiment data.

On Friday

A speech is expected from Christopher Kent, Assistant Governor (Financial Markets), Reserve Bank at a breakfast event hosted by foreign exchange provider XE.

Focus on Chinese economic data

The US Government shutdown is still playing havoc with the release dates for key economic data. Still, investors will also have to contend with Chinese data over the week, including trade and inflation. And trade talks continue between the US and China. The week begins on Tuesday in China with the January reading on foreign direct investment. In 2018, investment rose by 0.8% in yuan terms with analysts estimating that this equated to a 3% lift in US dollar terms over the year. Data on vehicle sales for January is also expected. And in the USweekly chain store sales data is issued along with the JOLTS job openings report and NFIB business optimism index. The number of unfilled jobs in November fell to the lowest level since June, though openings still exceeded unemployed Americans.

On Wednesday in the US, the monthly budget statement is released with weekly data on home loan applications and the consumer price Index. The core rate of inflation may have eased from 2.2% to 2.1% in January.

On Thursday in the USthe weekly jobless claims data (claims for unemployment insurance) is issued alongside producer prices and durable goods orders. The annual rate of core producer prices may have eased from 2.7% to 2.6% in January. And in China the January data on exports and imports is expected with lending growth figures.

On Friday, retail sales, industrial production, consumer sentiment, export/import prices, construction spending and the Empire State index are all scheduled for release. According to Adobe Analytics, e-commerce holiday season sales lifted by 16.5% from a year earlier signalling that overall retail sales were positive in December. Retail sales may have lifted 0.2%. And in China the latest inflation data is due – consumer and producer prices. Consumer prices are seen expanding at a 2% annual rate in January.

Our corporate reporting season moves into top gear

On Monday, companies reporting include Amcor, Bendigo & Adelaide Bank, Aurizon, GPT, Charter Hall Long WALE REIT and JB Hi-Fi.

On Tuesday: Challenger, Reckon and Transurban.

On Wednesday: Aveo Group, Bapcor, Computershare, CSL, Skycity Entertainment Group, and Tabcorp.

On Thursday: AMP, ASX, Evolution Mining, Goodman Group, IPH Limited, Magellan Financial Group, Newcrest, Suncorp, Tassal, Telstra, Treasury Wine Estate and Woodside Petroleum. 

On Friday: Abacus Property Group, Domain, Medibank, Healius, URB Investments and Whitehaven.

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Good morning, Australia

Monday, February 04, 2019

How’dy USA!

In US economic data non-farm payrolls (employment) rose by 304,000 in January (forecast +165,000). Unemployment rose from 3.9% to 4.0%. Average hourly earnings rose 0.1% (forecast +0.3%). Consumer confidence fell from 98.3 to 91.2 in January. The ISM manufacturing index rose from 54.3 to 56.6 in January (forecast 54.2). Construction spending rose by 0.8% in November (forecast +0.2%). 

US share markets were mixed on Friday. The strong economic data generally boosted sentiment together with optimism on the US-China trade talks. The energy sector rose in response to a 3% lift in oil prices. But a weaker-than-expected outlook from Amazon weighed on retailers. Shares in Amazon fell by 5.4%. The Dow Jones index rose by 64 points or 0.3%. The S&P500 index was up by 0.1%. But the Nasdaq index eased by 18 points (or 0.3%). Over the week, the Dow rose 1.3%, the S&P 500 rose 1.6% and the Nasdaq lifted 1.4%.

US treasuries were weaker on Friday (yields higher). US jobs data beat expectations although wage growth was soft. US 2-year yields rose by 4 points to 2.506% and US 10-year yields rose by 5 points to 2.684%. Over the week US 2-year yields fell by 9 points and US 10-year yields fell by 7 points.

Major currencies ended off the highs against the US dollar in US and European trade compared with the Asia close. The Euro rose from near US$1.1430 to US$1.1485 and was near US$1.1455 in late US trade. The Aussie dollar rose from lows near US72.35 cents to US72.85 cents but was back near US72.50 cents in late US trade. And the Japanese yen eased from near JPY108.85 to JPY109.57 and was near JPY109.48 in late US trade. 

Global oil prices rose near 3% on Friday. US jobs data was stronger than expected, boosting prospects for oil demand. In January, Saudi Arabia pumped 350,000 barrels per day less than December. And the number of oil rigs in operation in the US fell by 15 to an 8-month low of 847 in the past week. Brent crude rose by US$1.91 (or 3.1%) to US$62.75 a barrel and the US Nymex price rose by US$1.47 or 2.7% to US$55.26 a barrel. Over the week, Brent rose 1.8% and Nymex rose by 2.9%. 

The gold futures price fell by US$3.10 an ounce or 0.2% to $1,322.10 an ounce. The spot gold price was near US$1,318 an ounce in late US tradeOver the week gold rose by US$24.00 or 1.9%. Iron ore rose by US$1.60 or 1.9% to US$87.00 a tonne. Over the week, iron ore rose by US$12.30 or 16.5%.

Bonjour, Europe!

European share markets were firmer on Friday in response to strong US jobs data and optimism on US-China trade talks. But euro bank stocks were weak. Shares in Deutsche Bank lost 0.6% in response to earnings results. But shares in Electrolux rose 10% in response to its earnings result. The pan-European STOXX600 index rose by 0.3%. The UK FTSE lifted by 0.7% and the German Dax index rose by 0.1%. In London trade, shares of Rio Tinto rose by 1.0% and BHP rose by 1.8%.

Top of the morning, London

Base metal prices rose by up to 2.2% on the London Metal Exchange with zinc doing the best. But aluminium fell 1.7% and copper lost 0.6%. Over the week metals generally rose 3.3-8.4% with nickel up the most. But tin rose by just 0.8%.

G’day, Australia!

The ANZ job ads series is released with building approvals. The Royal Commission report into banking is handed down this afternoon. In the US, factory orders and the ISM New York index is released.

Have a great day, Australia!

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Good morning, Australia!

Wednesday, January 30, 2019

In US economic data consumer confidence fell from 126.6 to an 18-month low of 120.2 in January (forecast 124.9). The S&P/Case Shiller home price index fell 0.1% in November with the annual rate down from 5% to 4.7% (forecast 4.9%). Chain store sales in the past week were up 5.8% on a year ago, down from a 7% annual gain in the prior week.

US share markets were mixed yesterday. Earnings results were generally positive but there was also a raft of profit downgrades including those by 3M, Allergan and Harley Davidson. Investors also await key earnings from tech companies such as Apple, Amazon and Microsoft. And the Federal Reserve rates decision occurs on Wednesday. With an hour of trade to go, the Dow Jones index was up by 23 points or 0.1%. The S&P500 index was down by 0.3%. And the Nasdaq index lost 61 points or 0.9%.

US treasuries were firmer (yields lower) yesterday. There was strong demand for new debt issues on Monday and this demand continued for the $32 billion auction of seven-year notes yesterday. Consumer confidence data was weaker-than-expected. The Federal Reserve hands down its rate decision on Wednesday and US-China trade talks commence. US 2-year yields fell by 2 points to 2.57% and US 10-year yields fell by 3 points to 2.715%.

Major currencies generally eased against the US dollar in US and European trade compared with the Asia close. The Euro eased from highs near US$1.1445 to US$1.1410 and was near US$1.1425 in late US trade. The Aussie dollar fell from US71.75 cents to US71.45 cents and was near US71.55 cents in late US trade. And the Japanese yen eased from 109.19 yen per US dollar to JPY109.53 and was near JPY109.35 in late US trade.

Global oil prices rebounded by around 2.5% yesterday after falling 3.0% on Monday. The US imposed sanctions on Venezuelan state-owned oil company, PDVSA, easing concerns about global oversupply of crude. Meanwhile, Reuters report that Libya's biggest oilfield, El Sharara, will remain shut until departure of an armed group occupying the site. Brent crude rose by US$1.39 or 2.3% to US$61.32 a barrel and the US Nymex price rose by US$1.32 or 2.5% to US$53.31 a barrel. 

Bonjour, Europe

European share markets were firmer yesterday. There was caution ahead of key events such as the US interest rate decision and US-China trade talks. Technology shares fell 0.5% ahead of key US earnings results. The pan-European STOXX600 index rose by 0.8%. The UK FTSE lifted by 1.3% while the German Dax index edged up 0.1%. In London trade, shares of Rio Tinto rose by 3.4% and BHP rose by 0.7%.

Top of the morning, London

Base metal prices mostly rose on the London Metal Exchange. Nickel rose 2.5% and aluminium rose by 1.5% but zinc lost 1% while lead eased 0.2%. The gold futures price rose by US$5.80 an ounce or 0.4% to $1,308.90 an ounce. The spot gold price was near US$1,310 an ounce in late US trade. Iron ore rose by US$3.30 or 4.4% to US$78.70 a tonne. 

G’day, Australia

The Consumer Price Index is released with weekly consumer sentiment. In the US, the Federal Reserve hands down its interest rate decision. The ADP employment report is issued with pending home sales. US-China trade talks are held.

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Good morning, Australia

Friday, January 25, 2019

In US economic data, the leading index fell by 0.1% as expected in December. The Markit flash composite index rose from 54.4 to 54.5 in January (forecast 54.2). And new claims for unemployment insurance fell by 13,000 to a 49-year low of 199,000 in the latest week (forecast 220,000).

US share markets were mixed yesterday. Denting sentiment were comments from US Commerce Secretary Wilbur Ross, who said that the US and China were “miles and miles” away from a trade agreement. But chipmakers and airlines rose on positive earnings results. According to Refinitiv data, of the 97 S&P 500 companies that have reported fourth-quarter results, 75.3% have topped profit estimates.

US treasuries were firmer (yields lower), as investors favoured government bonds over equities. Investors focused on negative news on US-China trade talks. But economic data was positive. Next week, US Treasury will sell a combined $113 billion in two-year, five-year and seven-year fixed-rate securities. US 2-year yields fell by 3 points to 2.56% and US 10-year yields fell by 4 points to 2.71%. 

Major currencies were generally weaker against the US dollar in US and European trade, compared with the Asia close. The Euro fell from near US$1.1385 to US$1.1290 and was near US$1.1300 in late US trade. The Aussie dollar fell from US71.15 cents to US70.83 cents and was near the lows in late US trade. And the Japanese yen held between 109.40 yen per US dollar and JPY109.80 and was near JPY109.60 in late US trade.

Global oil prices were mixed on Thursday. Reuters highlighted the political crisis in Venezuela: "Washington signalled it could impose sanctions on Venezuela's crude exports as Caracas descends further into political and economic turmoil. The threat to reduce supplies supported futures prices". Brent crude fell by US5 cents or 0.1% to US$61.09 a barrel and the US Nymex price rose by US51 cents, or 1.0%, to US$53.13 a barrel 

Bonjour, Europe

European share markets were mixed on Thursday. Investors digested weaker data with the euro area Markit composite index down from 51.1 to 50.7 in January. Banks fell on downbeat comments from European Central Bank chief Mario Draghi. Draghi said that euro zone economic growth may be weaker than forecast. But tech stocks rose in response to an upbeat forecast from chipmaker STMicro. The pan-European STOXX600 index rose by 0.2%. The UK FTSE lost 0.4% while the German Dax index lifted 0.5%. In London trade, shares of Rio Tinto rose by 0.1% and BHP rose by 0.4%.

Top of the morning, London

Base metal prices were generally higher on the London Metal Exchange. Lead rose 2.5% and tin rose 1.5%, while other metals edged higher by 0.7%. But aluminium lost 1.2% and copper fell 0.4%.

The gold futures price fell by US$4.30 an ounce or 0.3% to $1,285.90 an ounce. The spot gold price was near US$1,280 an ounce in late US trade. Iron ore rose by US80 cents or 1.1% to US$75.40 a tonne. 

G’day Australia

In Australia and the US, no major economic data is expected. Next Tuesday, the CommSec State of the States report is issued.

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Good morning, Australia!

Monday, January 21, 2019

Howd’y USA

In US economic data, industrial production rose by 0.3% in December (forecast +0.2%) to be up 4% on the year. Manufacturing production rose 1.1% in December. Consumer sentiment fell from 98.3 to 90.7 in January (forecast (97.0). 

US share markets rose solidly on reports of an easing of trade tensions between the US and China. There were broad-based gains with industrials doing best. But shares of Netflix fell by 4% after the steaming company revealed lower-than-expected earnings in the quarter. At the close of trade, the Dow Jones index was higher by 336 points, or 1.4%. The S&P500 index was up by 1.3%. The Nasdaq index was higher by 73 points or 1.0%. Over the week, the Dow Jones rose by 3%, the S&P 500 rose by 2.9% and the Nasdaq rose by 2.7%.

US treasuries were weaker on Friday (yields higher)  on Friday. Equities were favoured over safe-haven assets like gold and government bonds. And production rose more than expected in December, while consumer sentiment fell. US 2-year yields rose 5 points to 2.62% and US 10-year yields rose 4 points to 2.79%. Over the week, US 2-year yields rose by 7 points and US 10-year yields rose by 9 points.

Major currencies were weaker against the US dollar in US and European trade compared with the Asia close. The Euro fell from near US$1.1410 to US$1.1350 and was near US$1.1370 in late US trade. The Aussie dollar fell from near US72 cents to around US71.60 cents and was near US71.65 cents in late US trade. And the Japanese yen eased from 109.30 yen per US dollar to JPY109.87 and was near JPY109.76 in late US trade. 

Global oil prices posted solid gains on Friday. OPEC released details of its plans to wind back production. And there were further signs of a thawing in the US-China trade dispute. Also there was a 21 rig decline in the number of oil rigs in operation in the US in the latest week, hitting 8-month lows. Brent crude rose by US$1.52 or 2.5% to US$62.70 a barrel and the US Nymex price rose by US$1.73 or 0.5% to US$53.80 a barrel. Over the week Brent rose by 3.7% and Nymex rose by 4.3%.

Bonjour, Europe

European share markets rose strongly on Friday. There was a report that US Treasury Secretary Steven Mnuchin discussed lifting some or all tariffs imposed on Chinese imports.  Also there was a Bloomberg report that said China has offered to ramp up imports from the US. Trade-sensitive stocks and sectors did best. The pan-European STOXX600 index rose by 1.8%. The UK FTSE lifted by 2% while the German Dax index lifted 2.6%.

Top of the morning, London

Base metal prices were all higher on the London Metal Exchange with lead up the most (2.2%) while tin only rose only 0.2%. Over the week zinc rose 3.7% and nickel rose 3.1% while lead was flat. The gold futures price fell by US$9.70 an ounce or 0.8% to $1,282.60 an ounce. The spot gold price was trading near US$1,281 an ounce in late US trade.  Over the week gold fell by US$6.90 or 0.5%. Iron ore rose by US$1.20 or 1.6% to US$75.95 a tonne. Over the week iron ore rose by US$1.25 or 1.7%.

In London trade, shares of Rio Tinto rose by 0.7% and BHP rose by 1.8%. 

G’day, Australia!

The CBA Business Sales Indicator is released with lending finance. Chinese economic growth figures are released. The IMF releases economic growth forecasts. US markets are closed for Martin Luther King Jr day.

Have a great day, Australia.

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Aussie jobs data in focus

Friday, January 18, 2019

On Monday      

The week kicks off  when Commonwealth Bank releases its measure on economy-wide sales for December. In addition, the Australian Bureau of Statistics (ABS) issues the final edition of Lending Finance. The report covers not just home loans, but also personal, business and lease loan commitments. The new report to be released in February will combine the detailed Housing Finance publication with Lending Finance.

On Tuesday

ANZ and Roy Morgan release the weekly consumer confidence data. Consumers remain remarkably upbeat, no doubt reflecting the strength of job markets as well as lower petrol prices. 

On Wednesday 

The Department of Jobs and Small Business will release the Skilled Vacancies data for December – a key leading index on the job market. Vacancies have flattened out at a healthy level.

On Thursday 

The ABS releases the December jobs report. The job market is in great shape. In November, 37,100 jobs were created with the jobless rate at 5.1%. In addition, a record proportion of Australians are in the workforce with the trend participation rate at record highs. In December, we expect that jobs lifted by 20,000 with the jobless rate at 5%. Also on Thursday, CBA releases the “flash” survey results purchasing managers in manufacturing and services.

Overseas: Chinese economic growth data in focus

Chinese economic growth and activity data are amongst the highlights in the coming week.

In the US, the economic release schedule is subject to change – a victim of the government shutdown. A bevy of indicators were to be released in the coming week but are now delayed

The week begins on Monday in China with economic growth data for the December quarter. In addition, the final estimates for 2018 are issued for retail sales, industrial production and investment. The Chinese economy likely grew by 6.5% over 2018 (6.4% in the December quarter), hitting official targets. But growth of 6.0-6.5% is more likely in 2019.

In addition, Chinese retail sales is tipped to have grown at an 8.2% annual pace in December with production up 5.3% and investment up 6%.

The International Monetary Fund (IMF) releases new economic forecasts on Monday. The data is likely to show a modest downgrade to growth expectations in 2019, currently estimated at 3.7%. However it’s likely that IMF economists will factor in more Chinese economic stimulus and some resolution to the US-China trade dispute.

On Tuesday in the US, data on existing home sales is released. Economists tip a 0.6% fall in December sales after a 1.9% lift the previous month. Sales stand at 3-month highs. Also the usual weekly data on chain store sales is released on Tuesday.

On Wednesday the influential Richmond Federal Reserve manufacturing index is expected to be released with the House Price index and weekly data on mortgage applications. Over the last seven months US house prices have been rising 0.2-0.4% per month.

In the US on Thursday the weekly data on new claims for unemployment insurance is released together with the leading index and the Kansas Federal Reserve manufacturing index. The leading index rose by a modest 0.2% in November after a 0.3% decline in October and 0.6% increase in September. Also on Thursday in the US the Markit ‘flash’ services and manufacturing indexes are issued. And similar ‘flash’ surveys are issued in France, Germany, Eurozone and Japan.

Friday in the US

So far, no indicators are set down for release. Previously, data on durable goods orders and new home sales were scheduled to be issued.

US earnings season

The US profit-reporting (earnings) season gets into full swing in the coming week. S&P 500 companies are expected to report a 14.3% rise in fourth-quarter earnings, lower than the 20.1%  growth forecast in October, according to IBES data from Refinitiv. So far, the earnings season is progressing well with share markets supported by better-than-expected results from global investment banks.

Amongst companies reporting:

Tuesday: IBM; Johnson & Johnson, Haliburton.

Wednesday: Procter & Gamble; Ford Motor.

Thursday: American Airlines; E*Trade; Intel; ResMed.

Friday: Colgate-Palmolive.

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Good morning, Australia

Monday, January 14, 2019

Howd’y USA

In US economic data, consumer prices fell 0.1% as expected in December to be up 1.9% over the year. Core prices (excluding food and energy) rose 0.2% as expected in the month to be up 2.2% over the year.

US share markets ended flat on Friday as investors squared positions ahead of the start of earnings (profit-reporting) season.  Shares in General Motors rose 7.05% after delivering a strong earnings forecast for 2019. Shares in Netflix rose 4% with Reuters citing "analysts' optimistic forecasts for subscriber growth". The energy sector fell in response to a lower oil price. The Dow Jones fell by 6 points or less than 0.1%, after trading in a range of almost 200 points. The S&P500 index was down less than 1 point. The Nasdaq index was lower by 15 points or 0.2%. Over the week the Dow rose by 2.4%, the S&P 500 rose by 2.5% and the Nasdaq rose by 3.5%.

US treasuries were firmer on Friday (yields lower) in response to benign inflation data and end-week position squaring. The UK Parliament vote on Brexit is held on Tuesday. US 2-year yields fell by 2 points to 2.54% and US 10-year yields fell by 3 points to 2.70%. Over the week US 2-year yields rose by 6 points and US 10-year yields rose by 4 points. 

Major currencies were generally weaker against the US dollar in US and European trade compared with the Asia close. The Euro eased from US$1.1535 to US$1.1455 and was near US$1.1465 in late US trade. The Aussie dollar eased from US72.35 cents to US71.85 cents and was near US72.20 cents in late US trade. And the Japanese yen eased from 108.15 yen per US dollar to JPY108.56 and was near the weakest levels in late US trade.

In the US, Citigroup releases earnings results.  

Bonjour, Europe

European share markets ended mixed on Friday. The pan-European STOXX600 index rose by 0.1% but the UK FTSE fell by 0.4% and the German Dax index lost 0.3%. UK home builders rose in response to a broker upgrade. But energy stocks fell in response to lower oil prices. In London trade, shares of Rio Tinto fell by 0.4% with shares in BHP lower by 0.3%.

Top of the morning, London

Global oil prices fell by 1.9% on Friday, snapping a 9-day winning streak. Investors took profits after solid gains over the past fortnight. The number of oil rigs in operation in the US fell by 4 to 873 last week. Brent crude fell by US$1.20 or 2% to US$60.48 a barrel and the US Nymex price fell by US$1.00 or 1.9% to US$51.59 a barrel. Over the week Brent rose by 6% and Nymex rose by 3.3%. 

Base metal prices rose by up to 2% on the London Metal Exchange with nickel up the most. But aluminium fell by 1.5% while copper rose only 0.2%. Over the week metals were mixed. Aluminium fell 3% and zinc fell 0.5% but tin rose 4.1% and nickel rose by 3.4%. 

The gold futures price rose by US$2.10 an ounce or 0.2% to $1,289.50 an ounce. The spot gold price was trading near US$1,287 an ounce in late US tradeOver the week gold rose by US$3.70 or 0.3%. Iron ore rose by US5 cents or 0.1% to US$74.70 a tonne. Over the week, iron ore rose by US$1.25 or 1.7%. 

G’day Australia

Credit & debit card lending data is released. In China, trade and money supply data is released.

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Good morning, Australia

Friday, January 11, 2019

Howd’y USA

In a wide-ranging question and answer session, the US Federal Reserve chair, Jerome Powell, reiterated that monetary policy can remain patient given benign inflation data. Powell says there is no evidence of a broader economic slowdown in the published data. In US economic data, new claims for unemployment insurance fell by 17,000 to 216,000 in the latest week (forecast 225,000).

US share markets traded in and out of positive territory over Thursday's session. Investors dissected weak earnings results from a number of retailers as well as the latest comments from the Federal Reserve chair. With an hour of trade to go the Dow Jones was higher by 15 points or 0.1% after trading in a 277 point range. The S&P500 index was up by 0.1%. The Nasdaq index was up by 5 points or 0.1%.

US treasuries were flat on Thursday. US equities moved in and out of positive territory while economic data was better-than-expected. US Treasury sold $16 billion in 30-year bonds. US 2-year yields were flat at 2.56% and US 10-year yields were flat near 2.73%. 

Major currencies were generally weaker against the US dollar in US and European trade compared with the Asia close. The Euro eased from US$1.1560 to US$1.1485 and was US$1.1500 in late US trade. The Aussie dollar broadly held between US71.70 cents and US 72 cents and was near US71.85 cents in late US trade. And the Japanese yen eased from 107.75 yen per US dollar to JPY108.45 and was near the weakest levels in late US trade.

In the US, the Consumer Price Index is scheduled.   

Bonjour, Europe

European share markets rose again on Thursday on continued optimism about US-China trade talks. But autos was the weakest sector, down 0.3% while UK retailers were softer on sales updates. The pan-European STOXX600 index rose by 0.3% after spending most of the session in negative territory. The UK FTSE was up by 0.5% and German Dax index up by 0.3%. In London trade, shares of Rio Tinto fell by 0.6% with shares in BHP lower by 0.7%.

Top of the morning, London

Base metal prices were mixed on the London Metal Exchange. Zinc and copper fell by up to 1.5% while other metals rose by up to 0.6%.

The gold futures price fell by US$4.60 an ounce or 0.4% to $1,287.40 an ounce. The spot gold price was trading near US$1,287 an ounce in late US trade. Iron ore rose by US15 cents or 0.2% to US$74.65 a tonne. 

Global oil prices rose modestly on Thursday after gains of near 5% in the previous session. Investors await signs of progress on US-China trade talks. But soft Chinese inflation data also weighed on investor sentiment. Brent crude rose by US24 cents or 0.4% to US$61.68 a barrel and the US Nymex price rose by US23 cents or 0.4% to US$52.59 a barrel.

G’day Australia

In Australia, retail trade data is released.

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Good morning, Australia

Wednesday, January 09, 2019

Howd’y USA

In US economic data, the NFIB Business Optimism index eased from 104.8 to 104.6 in December (forecast 103.6). According to the JOLTS survey, job openings eased from 7.131 million to 6.888m in November (forecast 7.063m). Chain store sales in the past week were up 8.9% on a year ago, down from the 9.3% annual growth in the prior week.

US share markets rose again on Tuesday on optimism about US- China trade talks. US President Donald Trump wrote on Twitter that “Talks with China are going very well!”. Shares in Boeing rose 3.3% after it reported that it had delivered a record 806 aircraft in 2018. With an hour of trade to go the Dow Jones was higher by 235 points or 1.0% after being up as much as 333 points in early trade. The S&P500 index was up by 0.8%. The Nasdaq index was up by 65 points or 1.0%.

US treasuries fell again on Tuesday (yields higher) with equities and commodities favoured over bonds on hopes for progress at the US-China trade talks. US Treasury sold $38 billion in three-year notes on Tuesday and will sell $24 billion in 10-year notes on Wednesday and $16 billion in 30-year bonds on Thursday. US 2- year yields rose by 6 points to 2.58% and US 10-year yields rose by 3 points to 2.71%.

Major currencies were mixed against the US dollar in US and European trade compared with the Asia close. The Euro held between US$1.1420 and US$1.1470 and was near US$1.1440 in late US trade. The Aussie dollar held between US71.15 cents and US 71.45 cents and was near US71.40 cents in late US trade. And the Japanese yen held between 104.42 yen per US dollar and JPY109.08 and was near JPY108.65 in late US trade.

Global oil prices rose by around 2.5% on Tuesday. US-China trade talks continue to encourage investors about the outlook for global growth and thus oil demand. Brent crude rose by US$1.39 or 2.4% to US$58.72 a barrel and the US Nymex price rose by US$1.26 or 2.6% to US$49.78 a barrel.

Bonjour, Europe

European share markets rose on Tuesday. Investors remain hopeful of progress in US-China trade talks. Retail stocks rose 2.1%. Shares in France's Carrefour rose 2.7% after Bank of America Merrill Lynch upgraded its rating on the stock. But shares in UK supermarket chain Morrisons fell 3.2% after sales fell short of forecasts. The pan-European STOXX600 index rose by 0.9% with the UK FTSE up by 0.7%. The German Dax index was up by 0.5% despite industrial production falling for a third month in November. In London trade, shares of Rio Tinto rose by 0.8% but shares in BHP fell by 0.3%.

Top of the morning, London

Base metal prices were mixed on the London Metal Exchange. Zinc, copper and aluminium fell by up to 1.7% while other metals rose by up to 0.8%.

The gold futures price fell by US$4.00 an ounce or 0.3% to $1,285.90 an ounce. The spot gold price was trading near US$1,285 an ounce in late US trade. Iron ore was unchanged at US$74.95 a tonne.

G’day Australia

In Australia, data on job vacancies and building approvals are released. In the US, minutes of the last Federal Reserve meeting are released with weekly mortgage applications. US President Trump addresses the nation at 1pm Sydney time. US-China trade talks continue.

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