Rally in commodities set to drive gains in the ASX

Stock Markets

Australian shares are poised to start the second quarter by opening higher after US stocks finished the first quarter on a high note. US stocks rallied on Friday, bolstered by signs of progress in the US/China trade talks and a rally in commodities which acted to offset weak US consumer spending data. On Friday, US Treasury Secretary Steven Mnuchin tweeted that he and US Trade Representative Robert Lighthizer had concluded "constructive" trade talks with their Chinese counterparts In Beijing.  Data released on Friday indicated that US consumer spending unexpectedly slowed in January and that income increased modestly in February, suggesting the economy was losing momentum after growth slowed in the fourth quarter.

Wall Street's major indexes rose on Friday with the Dow Jones, S&P 500, and NASDAQ 100 gaining 211.22 (+0.82%), 18.96 (+0.67%) and 60.16 (+0.78%) points respectively. For the quarter, the S&P 500 has risen 13%, which marks its best quarterly performance since the third quarter of 2009.

The benchmark S&P/ASX200 index closed up 4.6 points (+0.07%) on Friday, with the index shedding 33 points in the final 93 minutes of the trading session. Strong performance in technology stocks helped offset losses in utilities stocks. The ASX 200 concluded the first quarter of the year up 9.46%, which is its' best performance since the third quarter of 2009.

ASX 200 futures are currently up 18 points.

Today's data releases: NAB business survey March – business conditions and confidence; China Caixin manufacturing PMI March; Japan Tankan large manufacturing index first quarter; Euro zone unemployment rate February; UK Markit manufacturing PMI March; US retail sales February

Commodities and Currencies

Oil prices extended their rally as OPEC continues to ignore US President Trumps' concerns over rising oil prices while US oil output slips. Brent and WTI crude both closed in positive territory in Friday at US$67.58 (+0.72%) and US$60.14 (+1.42%) respectively.

Iron ore prices are up 2.5% at US$86.81 per tonne.

The spot price of gold is currently up 0.14% at US$1292.18.

The AUD is currently up 0.18% at US71.09¢.

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