ASX poised for slow start in spite of all time highs on Wall Street

Stock Markets

All the Major U.S indices finished the trading week at record levels last week. The Dow Jones and Nasdaq gained 0.9% and 0.6% respectively whilst the S&P 500 gained 0.5% to finish above 3000 points for the first time. Forthcoming interest rate cuts were the main catalyst for the surge in markets. The Federal Reserve Chairman Jerome Powell indicated that a rate cut (later in the month) may be appropriate to combat weakening global economic activity as well as rising trade tensions. The question is whether the cut will be 25 or 50 basis points. Investors are also anticipating corporate earnings season in the U.S as certain major banks (JP Morgan Chase, Citigroup, Goldman Sachs) are expected to release reports this week.

Sentiment in Australia has remained cautious despite the positivity on Wall Street as SPI Futures were down 30 points at 8:40am AEST. Locally we highly anticipate the release of jobs data this week. The RBA has indicated that it may cut the cash rate another 0.25% as early as August if unemployment has increased.

Today's data releases: China 2nd Quarter GDP.

Commodities and Currencies

Global oil prices rose steadily on Friday as Brent Crude increased 0.3% to US$66.72 a barrel. Iron ore fell 0.7% to US119.29 a tonne.Major currencies were stronger against the U.S Dollar including the AUD which rose from significant lows ($US69.82 cents) and is now trading at $70.13 U.S cents.

The spot price of iron ore is currently down 0.36% at US$116.55 a tonne.

The spot price of gold is currently up 1.0% at US$1,417 an ounce.

The AUD is currently up 0.71% at US70.2¢.

This article was written by Charles Odontuyaa – Investment Analyst, Rivkin Securities Pty Ltd. Enquiries can be made via charles.odontuyaa@rivkin.com.au or by phoning +612 8302 3633.