南京桑拿网-南京夜网-江苏夜网

Powered by Totosoft!
July 22nd, 2018 by admin

[email protected]: Oil jump to drive ASX higher

Nanjing Night Net

Photo: Peter BraigThe local sharemarket is poised to open higher after Wall Street was boosted by a jump in the oil price.

The US EIA crude oil inventories provided another 2.2 per cent gain for WTI oil overnight. Crude oil inventories declined for their fifth straight week, declining by roughly 3 million barrels against market expectations for a 1 million barrel increase. This provided further optimism to the market alongside speculative hopes from the Venezuelan oil minister that OPEC and Non-OPEC could commit to a 1.2 million barrel per day supply cut.

1. ASX: The ASX SPI Futures are pointing to a 27 point gain at the open. Both BHP’s (+1.76 per cent) and CBA’s (+1.45 per cent) ADRs performed well in the US overnight boding well for the session today.

2. US: The US ISM Services PMI jumped to its highest level in almost a year, blowing past market expectations for a 53.0 read to come in at 57.1. It’s difficult to know exactly why both the ISM Manufacturing and Non-Manufacturing PMIs took such a dive in August, but it does now look to have been only a temporary blip and the path to a December rate rise from the Fed is looking increasingly comfortable. The Bloomberg WIRP bond market implied probability of a December rate hike moved to 65 per cent after starting the week at 51 per cent.

3. Greenback: However, this did not provide much of a boost to the US dollar index, which closed the session largely unchanged. Although the USD did see a big 0.7 per cent gain against the Japanese yen as the rally in oil prices and the drop in the VIX reduced demand for safe haven assets.

4. Aussie dollar: The Aussie dollar lost 0.06 per cent to US$0.7616, but it dropped to an intra-session low of US$0.7593 immediately after the ISM PMI release. More serious drops in the Aussie dollar are being protected by the rally we’ve seen in commodities. But should commodities prices pullback the prospect of a December rate hike from the Fed could start to push the Aussie dollar back to its May levels of US$0.72-0.73.

5. Energy:  WTI oil moves to within a hair’s breadth of the key US$50 level closing at US49.74. Although given the huge burst in supply we saw after oil popped above US$50 last time it does seem like it’s difficult to sustain these levels without a more comprehensive supply cut deal.

6. Equities: The gains in the oil market were the main driver of the S&P 500’s 0.6 per cent gain. The oil price gain helped see the energy sector rally 1.8 per cent to be the best performer, closely followed by a 1.6 per cent gain in financials after rate hike expectations continued to firm up. On Wall St, Dow +0.7%, S&P 500 +0.6%, Nasdaq +0.6%. In New York, BHP +2.2%, Rio +2.2%. In Europe, Stoxx 50 -0.1%, FTSE -0.6%, CAC -0.3%, DAX -0.3%

7. Commodities: The 0.7 per cent gain in the Bloomberg Commodity Index was primarily driven by oil, but copper also saw a 0.2 per cent bounce. And despite the strong US data, the gold price managed to close the session relatively unchanged.

8. Japan: Most of the Asia-Pacific markets look set to open higher. But the 0.7 per cent drop in the Japanese yen will be welcomed by Japanese equities, which look set to open 0.8 per cent higher.

What happened yesterday

Gold stocks had a horrific session on Wednesday, leading the market’s fall after the precious metal nosedived on fears of US interest rate rises and a nearing taper of European Central Bank stimulus.

The All Ordinaries Gold sub-index lost 6.4 per cent, or around $3 billion in value, as the volatile sector suffered its worst day in five months.

An article by Bloomberg claiming the European Central Bank was considering unwinding its €80 billion monthly buying program sent financial markets into a tailspin, even though the report was not confirmed.

The benchmark S&P/ASX 200 Index and the broader All Ordinaries Index each fell 0.6 per cent to 5452.9 points and 5537 points respectively.

 This column was produced in commercial partnership    between Fairfax Media and IG

This story Administrator ready to work first appeared on Nanjing Night Net.