ASX set for a muted open

Stock Markets

Australian shares are set for a muted open today following a mixed closed on Wall Street on Friday. The Aussie dollar, which was already down about 2.5 per cent this month against the US dollar, slipped even further on Friday after the RBA substantially cut inflation and GDP forecasts for the year to June and the following 12 months. This week marks the resumption of high-level trade talks between US and Chinese officials in Beijing. US/China trade optimism that a deal could be reached ahead of the 1 March deadline was dented last week following a series of sceptical comments made by US officials. Wall Street’s major indices closed mixed on Friday as relief over first-quarter reports turned slightly to speculation of a pending earnings recession. The Dow Jones closed 63.20 (-0.25%) points lower while the S&P 500 closed flat. Conversely, the NASDAQ 100 was up 8.15 (+0.12%) points.

ASX200 futures are currently down 4.0 points. 

Today’s data releases: UK Q4 GDP and Industrial Production for December

Commodities and Currencies

Brent crude prices are currently up 0.8% to $US62.10 a barrel. Brent prices appear to be consolidating after the January rally.

Spot iron ore will resume trading today and is currently sitting at $US85.53 per tonne. The spot price of iron is set to surge today following last week’s leap in futures as Chinese traders return from the Lunar New Year break which saw the price rise as much as 5.8% before ending the session 3.1% higher at $US92 per tonne.

The spot price of gold is up about 0.5% and is now hovering around US$1316.61. Gold slipped about US$3 during the week though its uptrend remains intact and is likely to test the 2018 high of US$1355 in the short term.  

The AUD hit a one-week low on the RBA’s neutral interest rate outlook and is currently down 0.2% US70.88¢.

This article was written by Mithun Fernando – Investment Analyst, Rivkin Securities Pty Ltd. Enquiries can be made via mithun.fernando@rivkin.com.au or by phoning +612 8302 3633.