Advanced Search

Share Coverage



Category: Stockmarket / Futures / Economic Trends / Currency / Markets

Morning markets: Wall St gains as US dollar pummelled

Wednesday, 7 Sep 2016 06:40:59 | Sue Lannin

The Australian dollar approached 77 US cents on weak US economic data. (Giulio Saggin: ABC News)

Wall Street rose modestly after weaker-than-expected economic data gave the US central bank more reasons to delay a rise in interest rates.

Markets at 8:30am (AEST):

  • ASX SPI 200 futures -0.2pc to 5,401
  • AUD: 76.8 US cents, 57.2 British pence, 78.4 Japanese yen, 68.3 euro cents, $NZ1.037
  • US: Dow Jones +0.3pc to 18,538, S&P 500 +0.3pc to 2,186, Nasdaq +0.5pc to 5,276
  • Europe: EuroStoxx -0.2pc to 3,070, FTSE 100 -0.8pc to 6,826, DAX +0.1pc to 10,687
  • Commodities: Iron ore -0.3pc to $US58.60/tonne, Brent crude -0.6pc to $US47.33/barrel, spot gold +1.6pc to $US1,349/ounce

The US services industry expanded at its slowest pace in more than six years, causing the US dollar to fall as rate rise bets eased dramatically.

The Institute for Supply Management's non-manufacturing index fell to 51.4 - the lowest level since February 2010.

IG market analyst Angus Nicholson said the result pretty much wipes out any chance of a US rate rise this month.

"While it's all fun and games to see highly respected analysts' calls for September rate hikes get roundly pummelled by the data, the turn in the data is actually very concerning," he wrote in a note.

"These sorts of unanimous collapses in the manufacturing and non-manufacturing ISM PMIs rarely occur and often bode serious ill for the US economy."

Bloomberg money market data shows there is only a 24 per cent chance of a rate rise by the Federal Reserve this month.

In London, a fall in finance stocks weighed on the FTSE 100.

Futures trade indicates that the local market is likely to ease, despite a boost to commodity prices from a weaker US dollar.

The lower greenback saw spot gold prices rise.

Brent crude futures fell after an agreement between Saudi Arabia and Russia to stabilise prices contained no concrete steps to curb output.

On currency markets, the Australian dollar got a boost from strength in many commodities.

"The rally in commodities, emerging markets and high yielding asset classes benefits from continued weakness in US economic data," observed Mr Nicholson.

"The Aussie dollar is a key beneficiary of such an environment, and it staged a massive 1.35 per cent rally in the overnight session moving as high as $US0.7688.

"There could well be further upside to it today with second quarter GDP set to be released with market expectations steadily moving higher alongside every new second quarter data release over the past few days."

Today's agenda:

Australia:
  • GDP – Q2 (11:30am AEST)

US:
  • Federal Reserve's John Williams speaks (Time TBA)

China:
  • Foreign reserves – (Time TBA)

Canada:
  • Bank of Canada rates decision (12:00am AEST)

AustraliaPlus


 

Copyright © 1999- Shanghai Daily. All rights reserved.Preferably viewed with Internet Explorer 8 or newer browsers.

沪公网安备 31010602000204号

Email this to your friend