Pre-Open Data
Key Data for the Week
- Wednesday – CHINA – Retail Sales rose 12.4% in the 12 months to May, down from 17.7% in April.
- Wednesday – UK – Consumer Price Index rose 2.1% year-on-year in May, up from 1.5% in April.
- Thursday – EUR – Consumer Price Index
Australian Market
The Australian sharemarket lifted for a fourth consecutive day to close up 0.1%. The Energy sector was the strongest performer, up 1.5%, followed by Financials, while the Materials sector weighed on the market.
The Materials sector closed 1.6% lower following reports that China ordered state firms to limit their exposure to international commodity markets in an attempt to control the iron ore price. BHP gave up 1.7% and Fortescue Metals fell 1.6%, while Rio Tinto lost 0.6%.
Gains among the major banks lifted the Financials sector. Commonwealth Bank added 1.3% and ANZ lifted 0.9%, while NAB rose 0.7% and Westpac finished the session flat. Insurers were mixed; NIB slipped 0.9%, while QBE Insurance closed up 0.3% and Insurance Australia Group gained 1.2% despite reports that the company raised estimates for FY21 net natural perils claims costs after they received 4,300 claims so far from the recent Victorian storms.
Energy stocks enjoyed gains as the price of oil rose close to 2.0%. Woodside Petroleum lifted 2.3% and Oil Search rose 1.5%, while Beach Energy and Santos added 1.1% and 1.0% respectively.
The Australian futures market points to a 0.1% rise today.
Overseas Markets
European sharemarkets were mixed overnight. Travel and leisure stocks were among the top performers; easyJet rose 1.7% and International Airlines Group added 0.9%, while Ryanair gained 0.6%. The Financials sector was the main laggard after an investigation was opened into possible antitrust practices by Spanish banks with state backed COVID loans. Banco Sabadell shed 4.3% and CaixaBank fell 2.1%, while Santander Group lost 1.8%. Renewable energy stocks enjoyed strong gains; Vestas Wind Systems rallied 4.2%, while Siemens Gamesa climbed 3.0%.
By the close of trade, the German DAX slipped 0.1%, while the UK FTSE 100 and the STOXX Europe 600 both lifted 0.2%.
US sharemarkets eased on Wednesday following the highly anticipated US Federal Reserve meeting. The Information Technology sector closed lower; Facebook slid 1.7% and Microsoft slipped 0.4%, while Alphabet gave up 0.3%.
Financial services stocks also weakened; Visa fell 1.5% and MasterCard lost 1.2%, while PagSeguro Digital bucked the trend to gain 1.5%. Consumer Discretionary was the only sector to improve; e-commerce platform Shopify climbed 3.4%, while Amazon lifted 1.0%. By the close of trade, the Dow Jones gave up 0.8%, while the S&P 500 and NASDAQ fell 0.5% and 0.2% respectively.
CNIS Perspective
COVID inspired US stimulus may be drawing to an end, with news overnight the US Federal Reserve had begun discussions about scaling back bond purchases.
The recovery of the US economy has reached such a pace they will be bringing forward lower levels of support and anticipating two interest rate increases by the end of 2023.
The speed of vaccinations in the US and the withdrawal of social distancing measures is obviously playing a part in the economic recovery.
One of the first beneficiaries of the news was the USD that strengthened, and overnight the AUD fell around 1% against the USD, to US$0.7615.
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