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Category: Futures / Markets / Stockmarket / Currency / Money and Monetary Policy

Morning markets: US shares extend gains; Bank of England holds rates

Friday, 15 Jul 2016 06:32:56 | Sue Lannin And Michael Janda

There has been a feeding frenzy on stocks since the post-Brexit lows. (Timothy A Clary, file photo: AFP)

The optimism has continued on Wall Street, boosted by financial stocks, with the longest winning streak in four months generating fresh record highs overnight.

Markets at 8:00am (AEST):

  • ASX SPI 200 futures +0.1pc at 5,389
  • AUD: 76.3 US cents, 68.7 euro cents, 57.25 British pence, $NZ1.061
  • US: Dow Jones +0.7pc at 18,506, S&P500 up 0.5pc at 2,164, NASDAQ +0.6pc 5,034
  • Europe: FTSE -0.2pc 6,654, DAX +1.4pc at 10,068, Eurostoxx50 +1.3pc at 2,963
  • Commodities: Brent oil +1.9pc at $US47.12/barrel, Gold flat at $US1,335/ounce, Iron ore -0.1pc at $US58.00/tonne

Wall Street banking giant JP Morgan posted a quarterly net profit of $US6.2 billion on higher lending and a 35 per cent rise in revenue from fixed income trading, although the quarterly profit was down slightly from the same time a year ago.

JP Morgan shares rose 2.6 per cent, and other financial stocks basked in its glow.

Confidence was also boosted by new economic data which showed the number of Americans filing for unemployment benefits remained steady last week, near the lowest level in 43 years.

Other data showed that producer prices increased because of higher costs for oil and services.

The main news in Europe was the Bank of England's shock decision to leave interest rates on hold at 0.5 per cent in its first meeting post Brexit.

The pound initially surged, however, the BoE's statement soothed markets by all but assuring that there would be a rate cut next month.

IG's Angus Nicholson said the recent market rebound may have reduced the perceived need for urgent action.

It appears that the BOE is waiting for a better gauge on the impact of Brexit on the economy to calibrate their measures appropriately.

"The August meeting also times with the release of their Inflation Report round."

The key focus today will be on China's massive dump of economic data, including GDP, industrial production, retail sales and asset investment.

Today's agenda:

China:
  • GDP, Q2 (12:00pm)
  • Industrial production – June (12:00pm)
  • Fixed asset investment – June (12:00pm)
  • Retail sales – June (12:00pm) 

Europe:
  • Inflation – June (7:00pm)
  • Trade balance - June (7:00pm)

US:
  • Inflation – June (10:30pm)
  • Retail sales – June (10:30pm)
  • Industrial & manufacturing production – June (11:15pm)
  • Business inventories – June (12:00am)

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