To the scoreboard:
- Dow: 25,502.18 +39.60 (+0.16%)
- S&P 500: 2,850.40 +10.05 (+0.35%)
- AUD/USD: 0.7386 -0.0002 (-0.03%)
- ASX200 SPI futures (September contracts): 6,211 (+3)
1. Oil prices edged higher after Saudi Arabia unexpectedly cut production in July. The move also followed news that US sanctions against Iran are snapping back into place. The economic penalties – which were reimposed as part of President Trump’s decision withdraw the US from the Iran nuclear deal – affect a range of economic sectors including cars and metals.
2. In currencies, the UK pound fell to an 11-month low beneath $US1.30 as markets continue to prepare for the scenario of a no-deal Brexit. The USD gained ground against most of the major pairs, and the AUD is lower ahead of the RBA’s interest rate announcement today (2:30pm AEST).
3. With official interest rates practically a certainty to stay on hold at 1.5%, the focus will be on any tweaks in the language of the RBA’s accompanying statement. Markets will be looking for any clues to changes in the bank’s economic outlook ahead of this Friday’s Statement on Monetary Policy, which includes updated growth projections.
4. Trade war fears weighed on European markets overnight following a weak lead from China, as data showed a sharp fall in German factory orders. But US stocks shrugged off the latest round of trade tensions, led by more strong earnings results.
5. Warren Buffet’s Berkshire Hathaway posted a 67% surge in quarterly operating profit over the weekend, with a boost from the strong US economy and a rebound in insurance underwriting, Shares of the company rose more than 2% on Monday.
6. And in an example of the trade war’s economic impact, Chinese car imports slumped by 87% in June ahead of a change in tariff rules. China announced it would cut import tariffs to 15% from 25% effective from July 1, with the exception of US automarkers who now face tariffs of 40% as US-China trade tensions mount.
Here’s a look at the key events on today’s economic calendar:
- The Reserve Bank of Australia announces rate decision (2:30pm AEST).
- China releases data on its capital reserves (6pm AEST).
- Australian earnings season continues, including full-year results for Transurban and Sky City.
Have a great day.
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