US equity markets were closed for a public holiday on Monday, while European equities weakened after no new stimulus measures were announced in China, dashing investor hopes.
United States
Markets in the US remained closed on account of the Juneteenth holiday, while US futures drifted lower overnight with S&P500 e-mini futures down -0.1% along with contracts in the Nasdaq100 -0.16%.
Tonight, Federal Reserve Bank of St. Louis President James Bullard is expected to deliver his speech, along with his counterparts from New York and Chicago later in the week. Later in the week, investors will be focused on testimony by Fed Chair Jerome Powell before Congress. In terms of economic data tonight, US building permits for May are in focus, due to be released at 22:30 AEDT.
Europe
European equities closed lower on Monday, weighed by delays to a widely expected stimulus rollout by China. The Euro Stoxx 600 fell -1.02% along with the DAX -0.96%, CAC -1.01%, and FTSE100 -0.71%. In recent days, investors had expected announcements from Chinese officials to support the economy after rate cuts by the central bank last week. However, the State Council stopped short of releasing any specific proposals, noting the government is studying new measures that will be adopted in a “timely manner”.
Meanwhile, investors are awaiting a rate decision by the Bank of England, forecast to rise by a quarter of a percentage point to 4.75%. The decision will follow the release of inflation data for May on Wednesday, expected to show a slight moderation in headline price increases.
*Note: These prices are based on futures and/or CFD pricing and may therefore differ slightly from spot pricing.
Australia
The ASX is expected to open higher on Tuesday, with ASX futures up by 12 points or 0.16% to 7,281. The Index rose by 0.60% to 7294 at the end of trading on Monday. Nine out of eleven sectors closed in the green to help boost the index. Energy and materials were the outliers, declining -0.60% and 0.55% respectively. Healthcare was the star performer, rising 1.90%, consumer staples advanced 1.61% and utilities gained 1.16%. In healthcare, PolyNovo Ltd.’s share price jumped 3.99%, CSL Ltd. gained 2.37% while Healius Ltd. firmed 2.25%. In materials, Lake Resources plummeted -20% after announcing delays in the company’s Argentinian lithium project by six months and a rise in costs. Silver Lake Resources jumped 2.40% and De Grey Mining gained 1.84%, Pilbara declined by -1.43% and BHP receded -0.69%. In energy, stocks fell with New Hope losing -5.76%, Whitehaven Coal fell -2.88%, and Paladin trimmed -1.35%. In consumer staples, Woolworth’s rose 2.38%, meanwhile, Metcash and United Malt both added 1.38%. Abacus Property was the best-performing stock with a rise in the company’s share price by 5.81%, after announcing it had completed the institutional component of an equity raising round for its Abacus Storage King which the company intends to spin off.
The yield on the 10-Year Australian treasury note declined by 5 basis points to 3.97%, while the local currency weakened against the greenback by -0.4% to 0.6851 ahead of the release of the latest RBA policy minutes today at 11:30 AEDT.
Commodities
In commodities, oil prices declined over talks between European countries for managing future energy supplies as well as disappointment from the expecting Chinese stimulus. WTI and Brent Crude prices fell by -0.68% each to $71.29 and $76.09 respectively. In precious metals, spot gold closed -0.38% lower at $1,950, while spot silver fell 1.02% to $23.95. In industrials metals, copper prices were down by -0.31% to $389, meanwhile the price of nickel rose by 0.23% to $22,956, and SGX Iron Ore rose 0.30% on Monday although is -0.75% lower this morning at US$113.
Economic Calendar
20th June 2023
RBA Meeting Minutes 11:30
US Fed Bullard Speech 20:30
US Building Permits (MoM May) 22:30
21st June 2023
US Fed Williams Speech 01:45
This article was written by James Woods, Portfolio Manager, Rivkin Securities Pty Ltd. Enquiries can be made via [email protected] or by phoning +612 8302 3632.
