ASX set to open lower ahead of China trade data

Stock Markets

Australian shares set are open lower today as investors position themselves ahead of crucial China trade data which could potentially end the Wall Street induced rally in Australian shares. U.S. Treasury Secretary Steven Mnuchin reassured investors yesterday as he indicated that the trade talks with China went well on Wednesday, as the world’s two largest economies try to iron out an agreement to resolve their dispute before the looming deadline. More news is expected regarding the US/China trade negotiations as Chinese President Xi Jinping is expected to meet with top US officials in Beijing this week.

The S&P/ASX 200 index fell 15.5 (-0.3%) yesterday, as disappointing earnings results from CSL and CBA dragged the ASX lower.

Wall Street’s main benchmarks barely closed in positive territory as hopes for a resolution between the US and China helped underpin an extension in a week-long rally. The Dow Jones, S&P 500, and NASDAQ 100 were marginally up overnight, with the indices gaining 117.51 (+0.46%), 8.30 (+0.30%) and 1.21 (+0.02%) points respectively.

ASX 200 futures are currently down 10.0 points. 

Today’s data releases: China trade balance January; Japan fourth quarter GDP; Euro zone fourth quarter GDP; US final PPI January, AU Consumer inflation expectations February

Commodities and Currencies

Oil prices have been bolstered by Saudi Arabia declaring that it would cut crude exports with Saudi Arabia’s Energy Minister stating that production will fall below 10 million barrels per day in March. OPEC has reported that it has had to cut its output by almost 800,000 barrels per day, most of this reduction is attributed to output cuts by Saudi Arabia. Brent crude prices are currently up 2.08% to US$63.72 a barrel.

Iron ore prices were down 0.51% overnight and are currently sitting at US$88.08 per tonne.

The spot price of gold is currently down 0.38% and is now hovering around US$1305.85

The AUD is currently flat at US70.89¢.

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.