ASX expected for higher open after big leads overseas

Stock Markets

US:Last night's trading session saw the S&P500 surge close to 1.5% following a statement from the US stating that they would delay imposing tariffs on some Chinese products (which included laptops and cell phones). Apple shares rallied 4% following the unexpected move.

Regardless of the market rally investors should remain sceptical that the US would switch its stance right before the 2020 election in which Trump is expected to be campaigning hard on the issue. 

Fortunately, in the short term this may ease fears of a recession triggered by the prospect of a trade war which has triggered the majority of market volatility in the last 12 months. 

ASX:ASX futures are up 48 points to 6540 near 9am AEST, following a positive trading session overnight in the US market. CSL reports an increase in overall net revenue and Magellan finance shares double in price year to date. Today investors will be looking closely at quarterly wage growth data

Commodities & Currencies:

China's steel futures rose on Tuesday close to 3% as some steel mills began to limit production on recent price falls and a slowdown in expected demand.

Gold futures price fell by 0.2% and Iron ore fell by 6.6%.  

Argentina's peso currency crashed initially dropping 30.3% to a record low of 65 per $US but later recovered to end the day 15.3% weaker at 53.5 per $US. This saw the Merval stock index (the most important index of the Buenos Aires Stock Exchange) fall by almost 38%.Global oil prices steadied with Saudi state-owned oil explorer Aramco decreasing their spending on wells and other development projects by 12%, likely tightening supply. Gold continued its increase by US$8.70 to US$1,517.20 an ounce and iron ore remained unchanged at US$94.80 due to Singapore having a public holiday.

The spot price of gold is currently down 0.64% at US$1,501.50 per ounce. 

The AUD is currently down 0.04% at US$0.6796.

This article was written by 'Luke Bell – Portfolio Manager, Rivkin Securities Pty Ltd. Enquiries can be made via [email protected] or by phoning +612 8302 3633.