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The Experts

Good morning, Australia

Craig James
Friday, June 28, 2019

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How’dy USA

In US data, the economy grew at a 3.1% annual rate in the March quarter, in line with forecasts. The core personal consumption deflator (inflation measure) grew at a 1.2% annual rate (forecast 1.0%). Pending home sales rose by 1.1% in May (forecast 1.0%). New claims for unemployment insurance rose by 10,000 in the past week to 227,000 (forecast 220,000). The Kansas Federal Reserve manufacturing index fell from +2 points to -3 points in June.

US share markets were mixed on Thursday. Investors were reluctant to push stocks too far ahead of the G20 meeting over the weekend, especially with mixed news about progress of US-China trade talks. Energy shares fell by 0.8% but the Philadelphia Semiconductor index rose by 1.5%. Shares in Ford rose 2.9% after the automaker announced it would cut 12,000 jobs in its Ford Europe division. The Dow Jones index closed down by 10 points or less than 0.1%. The S&P500 index rose by 11 points or 0.4%. But the Nasdaq rose by 58 points or 0.7%.

US treasuries were firmer (yields lower) on Thursday on continued uncertainty about whether a trade deal would be secured between China and the US. US Treasury sold $32 billion in seven-year notes to solid demand. US 2-year yields fell by 4 points to 1.74% and US 10-year yields fell by 4 points to 2.01%.

Bonjour Europe

Major currencies were stronger against the US dollar in US and European trade compared with the end of Asian trade. The Euro rose from US$1.1350 to US$1.1380 and was around US$1.1370 in late US trade. The Aussie dollar rose from US69.84 cents to US70.08 cents and was near the highs in late US trade. And the Japanese yen lifted from 108.15 yen per US dollar to JPY107.67 and was near JPY107.74 in late US trade.

Global oil prices were little-changed ahead of the G7 meeting this weekend and the meeting of OPEC nations at its allies on July 1. The Brent crude price rose by US6 cents to US$66.55 a barrel. And the US Nymex rose by US5 cents% to US$59.38 a barrel.

Base metal prices were mixed on the London Metal Exchange (LME) on Thursday. Zinc lost 1.6% and aluminium fell by 1.4%, copper edged 0.1% while nickel did best, up 1.9%.

The gold futures price fell by US$3.40 an ounce or 0.2% to US$1,412.00 an ounce. But the spot gold price was trading near US$1,408 an ounce in late US trade. Iron ore rose by US$1.60 or 1.4% to US$116.35 a tonne due to ongoing supply concerns.

G’day Australia

In Australia, the private sector credit and APRA banking data are due. In the US, personal income and spending figures are released with the Chicago personal managers index and consumer sentiment index. In China the official manufacturing and services gauges are released on Sunday.

Published: Friday, June 28, 2019


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