US equities higher, WTI drops back below US$51, ASX futures hitting selling resistance - up 4 points

Today's first image is not a chart, it's a snap of a beautiful morning in Shanghai where I'm writing from. Great to get some local perspectives on the market here - while construction in China has no doubt slowed down, the locals here are a little confused as to why the rest of the world is disappointed about the prospects of 6-7% GDP growth, with Chinese GDP having grown to such large base over the last 10 to 15 years. Today's first chart shows the growth in Chinese GDP (in USD billions) since 2000 and while that rate of growth (which was unsustainable) is slowing, the wealth that it has created here is mesmerising. China's biggest task is offering its wealthy citizens onshore investment destinations to store and grow this accumulated wealth, which needs to go beyond the stock market and property - these markets simply can't take the weight of the money and it is obvious on the ground here that China will focus on maturing as a centre for business and investment in order to stem the tide of money leaving its shores for more sophisticated investment markets. Anyway, I'm here for a few days and will dig up as many anecdotes as I can find. For those of you not aware, Rene Rivkin was actually born in Shanghai in the 1940s during the Japanese occupation, after his parents fled the Russian Revolution. They later moved to Sydney where Rene grew up and eventually honed his pathological interest in financial markets, which lives on in the brand's DNA today. We continue to attract and retain team members who are so passionate about trading and investing, and I can't help but think that this legacy plays a big part.


Below I've stuck with the theme of range-bound WTI crude oil prices, which failed to break higher overnight. Despite the US Energy Information Administration's best attempts to assure oil traders that storage is peaking and set to decline later in the year, crude stocks in the US had their biggest gain in 14 years - up another 10.9 million barrels versus expectations of around 3.5 million. This pushed the WTI crude price lower and will keep the US oversupply story alive and well. In fact if US$50 oil isn't hurting US production enough, the Saudis may only become more staunch in their view of uninterrupted supply from the Middle East.

The second Rivkin Trader chart simply shows the level of the ASX 200 cash index CFD, which is hitting its recent highs again, and the AUDUSD currency pair, which seems to be settling just below US$0.77 following this week's hold decision from the RBA. As you can see from today's Global Markets matrix, equities remain healthy, especially with respect to commodity prices, which remain subdued. US Fed minutes were released last night, showing that there are mixed views among committee members about whether rates there should rise this year or next, but that didn't move markets too much.

Today‚Äôs charts are taken from the Rivkin Trader platform. 30,000 global instruments available to trade including FX, commodities, index, ETFs and international shares. Trade Australian share CFDs from just $8 or 0.10%. Click here or phone 1300 748 546 to open a Rivkin Trader account now.

Upcoming economic announcements: Bank of Japan foreign asset purchases at 9:50am, Bank of Japan's monthly report at 3pm, German trade balance at 4pm, UK rate decision (no change exp) at 9pm, all Sydney time.


This article was written by Scott Schuberg, CEO of Rivkin Securities Pty Ltd. Enquiries can be made via info@rivkin.com.au or by phoning +612 8302 3600.

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