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Good morning, Australia!

Craig James
Monday, November 19, 2018

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Howd’y USA

In US economic data, industrial production rose by 0.1% in October (forecast +0.2%). The Kansas City Federal Reserve manufacturing index fell from +24 to +5 in November. There were net capital outflows of US$29.1 billion in September but net capital long-term inflows were US$30.8b (forecast +US$46.2b). 

US share markets were mixed on Friday with technology shares weaker. Shares in Nvidia slumped by 18.8%, after the chipmaker blamed a decline in cryptocurrency mining for a drop in sales. But investors were encouraged by progress in the US-China trade dispute. At the close of trade, the Dow Jones was up by 124 points or 0.5%. The S&P500 index was up by 0.2% but the Nasdaq index lost 11 points or 0.2%. Over the week, the Dow lost 2.2%, the S&P 500 index fell by 1.6% and the Nasdaq lost 2.2%. 

US treasury bond prices rose on Friday (yields fell) on signs that the Federal Reserve was drawing close to a pause in the rate-hiking cycle. In an interview with CNBC, Fed Vice Chair Richard Clarida said the bank needs to be particularly data-dependent as rates are near the 2.5% to 3.5% "neutral" range. US 2-year yields fell by 6 points to 2.81% and US 10-year yields fell 5 points to 3.06%. Over the week, US 2-year yields fell by 8 points and US 10-year yields fell 7 points.  

Major currencies were firmer against the US dollar in US and European trade compared with the Asian close. The Euro rose from lows near US$1.1320 to highs near US$1.1420 and was near the highs in late US trade. The Aussie dollar rose from lows near US72.50 cents to US73.35 cents and ended near the highs in late US trade. And the Japanese yen lifted from 113.45 yen per US dollar to JPY112.65 and was near JPY112.82 in late US trade.

Global oil prices ended flat on Friday as investors debated the future direction for prices. Brent crude rose by US14 cents or 0.2% to US$66.76 a barrel and the US Nymex price was unchanged at US$56.46 a barrel. Over the week Brent fell by 4.9% and Nymex fell by 6.2%.  

Bonjour, Europe

European share markets fell on Friday. Investors were focused on the proposed Brexit deal and wrangling over budget issues between Italy and the European Commission. Shares in French media group Vivendi rose by 3%, after the company posted better-than-expected third-quarter sales. The pan-European STOXX600 index fell by 0.2%. The German Dax index fell by 0.1% and the UK FTSE index lost 0.3%. In London trade, shares of Rio Tinto rose by 2.9% and BHP lifted by 1.1%. 

Top of the morning, London

Base metal prices rose by as much as 3.9% on the London Metal Exchange on Friday with the price of lead up the most. But tin fell by 0.2%. Over the week, zinc rose 3.8% and copper gained 2.4% but nickel lost 1.1% and aluminium fell by 1.3%. 

The gold futures price rose by US$8 an ounce or 0.7% to $1,223 an ounce. The spot gold price was trading near US$1,221 an ounce in late US trade. Over the week gold rose by US$14.40 or 1.2%. Iron ore rose by US95 cents or 1.3% on Friday to US$75.10 a tonne. Over the week, iron ore fell by US$2.15 or 2.8%. 

G’day, Australia!

The CommSec Home Size Trends report is released with the Australian Bureau of Statistics' "Overseas Arrivals & Departures" publication. In the US, the NAHB housing Market index is issued.

Have a great day, Australia!

Published: Monday, November 19, 2018


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