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Category: Stockmarket / Currency / Markets / Futures

Morning markets: US closed, European markets ease, oil bounces

Tuesday, 6 Sep 2016 06:43:23 | Sue Lannin

Brokers work in the stock exchange in Frankfurt/Main, Germany, on December 6, 2011. (AFP: Daniel Roland, file photo)

European markets were very slightly lower despite a surge in oil prices which pushed major energy stocks higher.

Markets at 8:25am (AEST):

  • ASX SPI 200 futures -0.4pc to 5,398
  • AUD: 75.88 US cents, 57 British pence, 78.4 Japanese yen, 68.05 euro cents, $NZ1.0385
  • US: Markets closed
  • Europe: EuroStoxx -0.1pc to 3,078, FTSE 100 -0.2pc to 6,879, DAX -0.1pc to 10,672
  • Commodities: Iron ore -0.3pc to $US58.80/tonne, Brent crude +1.2pc to $US47.40/barrel, spot gold +0.2pc to $US1,327/ounce

Wall Street was closed for the Labor Day holiday.

However, in futures trade, the Dow Jones futures ended up 6 points lower at 18,474.

In London, the FTSE 100 dropped 15 points to 6,879 after bank shares fell, and despite gains around 1 per cent for energy giants such as Shell and BP.

The British services industry picked up, no doubt helped by a falling pound since the Brexit vote, with the IHS Markit Purchasing Managers Index jumping to 52.9 last month from a seven-year low of 47.4 in July.

However, NAB's co-head of foreign exchange strategy Ray Attrill said the bounce may be short-lived if Brexit becomes disruptive to the nation's key banking sector.

"We see that Britain runs a surplus with the rest of the work in services in the order of £50b a year, or close to $100b," he wrote in a note.

"While we instinctively think of Premier League football TV rights and global syndication of Britain's Got Talent, the fact is some 70 per cent of the UK services surplus is in financial services.

"This is the sector most at risk from any failure of the UK Government to negotiate a 'soft' Brexit that preserves the ability of financial services firms based in the UK to 'passport' in to the rest of Europe."

Commodity markets were the other key source of action overnight, with oil prices jumping on a potential deal between Saudi Arabia and Russia to curb output.

The world's biggest oil producers promised to stabilise oil markets, but did not any announce any concrete measures at a press conference on the sidelines of the G20 meeting in China.

Crude oil rose by as much as 5 per cent before paring its gains.

On currency markets, the greenback continued to fall after fewer jobs were created in the US than expected in August, putting off expectations of a US interest rate rise.

Australia's Reserve Bank is expected to keep interest rates on hold when it meets later today and announces its decision at 2:30pm (AEST).

The Australian dollar eased back from its overnight high against the greenback.

Today's agenda:

Australia:
  • ANZ consumer confidence (9:30am AEST)
  • Current account balance – Q2 (11:30am AEST)
  • RBA interest rate decision (2:30pm AEST)

Europe:
  • GDP – Q2 (7:00pm AEST)

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