Turnbull gets trigger for double dissolution, global equity markets higher on oil rebound, ASX SPI200 futures 53 points higher
The big news locally on Monday was the failure of the Senate to pass a Liberal bill restoring an industry building watchdog, which now hands Prime Minister Malcom Turnbull the trigger needed for a double dissolution. Turnbull previously said should the bill be voted down, he would call an election from July 2nd. While still the preferred PM over Labor leader Bill Shorten, support has waned recently over tax reform, rejecting calls for investigations into major banks as well as planned healthcare and education cuts. Should an election be set for July 2nd, while we may see some market volatility as a result I would not expect to see near the same levels in the Australia dollar & equities as we have with the British Pound & U.K. equity markets leading into the June 23rd Euro-Zone referendum, however we will wait to see the market reaction on any announcement.
Global equity markets were broadly higher after oil prices regained early losses of up to 6.80% for Brent Crude futures which some analysts are attributing to a workers strike in Kuwait reducing production capacity. Brent crude finished slightly positive with up 0.18% while WTI crude was down 1.44%, the DAX30 was 0.68% higher, followed by the FTSE100 (+0.15%), Euro Stoxx 50 (+0.32%), S&P500 (+0.65%) and the Nasdaq100 (+0.58%).
Commodities were higher across the board, with iron ore up 3.57%, copper +0.53%, natural gas 2% while the Thomson Reuters equal weighted continuous commodity index finished 0.65% higher as the outlook for commodities continues to improve, highlighted on the chart below. I expect this to be positive for the resources sector in particular today, however the broader market is also set to open stronger with ASX SPI200 futures up 53 points in overnight trading.
· German ZEW Survey – Economic Sentiment (Apr) 5:00pm AEST
· U.S. Building Permits (Mar MoM) 10:30pm AEST
This article was written by James Woods – Global Investment Analyst, Rivkin Securities Pty Ltd. Enquiries can be made via firstname.lastname@example.org or by phoning +612 8302 3600.