US/China trade optimism dialed back on increased clarity

Stock Markets

Australian shares are poised to open marginally lower today after US stocks closed mixed after investors received increased clarity regarding the US/China trade talks. Markets rallied on recent news reporting that the trade talks were nearing a conclusion with a date for the signing ceremony expected to be announced this morning. However, yesterday's comments from US President Donald Trump contradicted this and clouded sentiment as he stated that a trade deal with China is at least four weeks away. In addition to this, several US officials also indicated that there was still a substantial amount of work to be done. US President Donald Trump spoke at a meeting with Chinese Vice Premier Liu He earlier this week in Washington, where Lui He has indicated that significant progress has been made. Trump also said that a summit with his Chinese counterpart Xi Jinping would not be announced until a trade deal was in place.

Wall Street's major indexes closed mixed overnight, as investors sought out more clarity about the ongoing Us/China trade talks. The Dow Jones and S&P 500 ended Thursday's session up 166.5 (+0.64%) and 5.99 (+0.21%) points respectively. Conversely the NASDAQ 100 closed marginally lower, with the index losing 3.769 (-0.05%) points.

The benchmark S&P/ASX200 index closed down 52 points (-0.83%) on Thursday, with a sector-wide sell off marking an end to a seven-day rally in the index. All major GICS sectors closed lower yesterday, with the information technology and consumer discretionary sectors posting the lowest percentage losses.

ASX 200 futures are currently down 9 points.

Today's data releases: AiG performance of construction March; Euro zone industrial production February; US Non-farm payrolls March; Consumer credit February

Commodities and Currencies

Oil prices retraced overnight after a strong rally on the back of OPEC supply cuts and Venezuelan sanctions limiting supply. Brent crude and WTI crude closed in negative territory at US$69.25 (-0.09%) and US$62.10 (-0.58%) respectively.

Iron ore prices are down 0.2% at US$92.90 per tonne.

The spot price of gold is currently up 0.19% at US$1292.45.

The AUD is currently up 0.01% at US71.13¢.

This article was written by Mithun Fernando – Investment Analyst, Rivkin Securities Pty Ltd. Enquiries can be made via [email protected] or by phoning +612 8302 3633.