China Communist Party Holds 19th National Congress

The Dow Jones had a relatively strong session last night, rising to 23,157. The ASX 200 consolidated recent gains yesterday, closing with a minor 0.02% gain. The index is still just below its year to date highs and would need another 1% gain to make new highs. Investors may need to be cautious about a correction from here since the recent rally has run quite hard and fast however with strong leads from Wall Street, we may see further gains today.  

WTI oil prices continue to hover around US$52 per barrel despite the Department of Energy report indicating that oil stockpiles decreased last week and US crude production fell over 11% (due to Hurricane Nate). On the other hand, gasoline and distillate inventories increased which seems to have stopped the oil price from rallying further.

The Chinese Communist Party is hosting its 19th National Congress in Beijing this week. Indications are that China will continue to stabilize its economic "soft landing" as GDP growth has softened relative to the rapid growth of prior years. China will release its GDP for the third quarter which is expected to come in at 6.8%. The latest announcements also indicate China may pursue a more open foreign investments policy which could lead to loosened capital and/or currency controls.

Today Australia releases its employment data with the unemployment rate expected to remain steady at 5.6%. A net increase of 14,100 jobs is expected for September which would be significantly below the 54,200 from August but would still be considered a strong number.  

  

Data Releases:

–    AU Employment Change and Unemployment Rate 11:30am AEDT

–    China GDP and Industrial Production 1:00pm AEDT

–    UK Retail Sales 7:30pm AEDT

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This article was written by William O'Loughlin – Investment Analyst, Rivkin Securities Pty Ltd. Enquiries can be made via william.oloughlin@rivkin.com.au or by phoning +612 8302 3633.