Good morning. Here’s what’s happening as Friday begins and markets get underway in Australia and Asia.
First, the scoreboard (8:10am AEDT):
• Dow: 20810 +34 (+0.2%)
• S&P 500: 2363.5 +0.73 (+0.03%)
• SPI 200 Futures (March – delayed pricing): 5,748.5 -11.5 (-0.2%)
• AUD/USD: 0.7718 +0.0017 (+0.2%)
And the news.
1. Stocks seen weaker: Futures point to a lower open for Australian stocks. The S&P 500 and Dow rose with the latter poised to scale another record as US president Donald Trump met corporate executives to discuss job creation and his tax and trade policies. US Treasury Secretary Steven Mnuchin said the stock market’s rally since the election is a positive reflection on the new administration and he viewed it as a score card. Oil rose after data showed in US crude inventories.
2. Aussie dollar: The Australian dollar hit the highest level since mid-November overnight, boosted by renewed US dollar weakness. And that came despite disappointing Australian economic data released over the past two days, along with some sharp declines in industrial and bulk commodity prices including iron ore overnight, Australia’s largest goods export by dollar value. The Aussie was propelled higher overnight following remarks from US treasury secretary Steve Mnuchin. Investors were disappointed by comments made by Mnuchin that the effect on the US economy of the upcoming fiscal stimulus will be limited in 2017. That depressed US yields.
3. Turnbull may meet Trump before the budget: Prime minister Malcolm Turnbull and Trump are reportedly planning to meet in New York in May to commemorate the 75th anniversary of the Battle of the Coral Sea. The meeting time comes just days before the federal budget set to be delivered on May 9. According to the Sydney Morning Herald, the predicament of whether Turnbull should attend the event abroad has caused a rift among Australian government advisers. Neither leader has confirmed their schedule as yet.
4. Data today: No economic data for Australia. UK has mortgage approvals. US releases data on news home sales and consumer sentiment.
5. Central bank speakers: Reserve Bank of Australia governor Philip Lowe fronts lawmakers where he is likely to be quizzed on housing affordability, interest rates, inflation, general economic outlook and impacts from Trump’s policies. ECB board member Peter Praet speaks in London.
6. Company news: Super Retail, Mayne Pharma reports earnings. Graincorp holds its annual shareholders meet. JC Penney posts earnings in US, Royal Bank of Scotland and Pearsons are among those releasing results in UK.
7. Iron ore is unwinding: Iron ore slumped in spot markets on Thursday following a late plunge in Chinese futures. With the latter down heavily again overnight, it looks like the weakness may extend into a third session. According to Metal Bulletin, the spot price for benchmark 62% fines tumbled 3.14% to $91.34 a tonne, accelerating on the 0.6% slide recorded in the prior session. It was the largest one-day percentage decline since January 6.
8. Copper is tumbling: Prices of the mineral fell following an Axios report that Trump may not take action on his proposed $US550 billion infrastructure promise until 2018. Thursday’s slide has pushed copper prices down to their lowest level in two weeks. Copper has soared more than 27% since October 24 as traders began to price in the possibility that Trump’s proposed plan for infrastructure would lift demand for the metal.
9. Mexican peso is at highest since Trump win: The currency rose by more than 1% after US Secretary of State Rex Tillerson met with Mexican officials. There would be no mass deportations during, he assured during a press conference after his meeting with Mexican Foreign Minister Luis Videgaray.
10. The Brexit effect: Morgan Stanley is planning to move 300 jobs out of London as a result of the Brexit vote, and has already started looking for office space in a number of European cities, according to a report from Bloomberg. The bank, which employs around 6,000 people in the United Kingdom, is said to be exploring office space in both Dublin and Frankfurt with the aim of creating a larger European Union hub.
And the end of week bonus: