Commodity prices on the move

Rivkin Investment Team

US equity markets closed mixed on Friday, with the Dow Jones Industrials Average (DJIA) dipping by 1.22 points (-0.01%) to close the day at 10,465.94, while the S&P500 and Nasdaq both lifted slightly, gaining by 0.07 points (+0.01%) and 3.01 points (+0.13%) respectively.

From the S&P500, and we can attribute the majority of the gains to the consumer services (+0.64%) and basic materials (+0.61%) sectors, while the utilities and technology sectors fared the worst, declining by 0.59% and 0.53% respectively.

The ASX SPI200 (Sep 10) futures added 7 points in overnight trade on Friday, to be currently at 4470.

The VIX (volatility) Index, after reaching a high of 26.34, closed the day at 23.50, down 0.63 points (-2.61%) compared to Thursday’s close.

Commodity prices were up strongly, with the CRB Commodity Index gaining 4.15 points (+1.54%) to close at 274.35. The majority of the gains came from the grains (wheat, corn, and soybeans) and industrials sectors (aluminium, cotton, nickel, and copper), which gained by 3.54% and 2.12% respectively. Technically, not only have prices broken above an important region of resistance between 265 and 270, but they have done so in a very strong and impulsive fashion. With momentum increasing, further gains appear likely.

To the currencies, and the US Dollar Index closed marginally lower, dipping by 0.097 points (-0.12%) to end the week at 81.539. The Canadian dollar (CAD) was the best performing currency against the greenback in the 24 hours up to Friday’s close, gaining by 0.72%. The British pound (GBP) and Australian dollar (AUD) also appreciated against the USD, gaining by 0.49% and 0.41% respectively.

The AUD is currently buying 90.42 US cents, 57.64 British pence, 67.27 Euro cents, and 78.18 Japanese yen.

It is a fairly big week of economic data releases for the Australian economy, with TD Securities inflation figures our today, retail sales, building approvals, and the RBA cash rate decision out on Tuesday, The Australian quarterly and yearly house price index out on Wednesday, and the Reserve Bank’s quarterly statement on monetary policy released on Friday. Plenty to keep the economists busy!

In addition, reporting season is ramping up, with the following companies due to report this week (exact dates are in brackets), Crane Group (02/08), Hills Industries (03/08), AXA Asia Pacific Holdings (04/08), West Australian Newspapers (04/08), News Corporation (05/08), Rio Tinto (05/08), and TABCORP Holdings (05/08).