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By Gary Burton
The local stock market is set to rise at the open, with futures suggesting an eight-point move higher, while the dollar should provide support for resources in today's trading.
Is the Trump trade really back on?
1. Trump: Although it was a positive night for the DOW and S&P500, both failed to trade above the highs of the markets pre-FMOC rate decision. The Trump trade is back on, however it is lacking momentum to reach the nominal target of 20,000. The DOW lead by the financials on expected margin improvements with still positive data flowing, which saw the Core CPI up 0.2% for November.
2. Growth: This is what the global economies are looking for: real price growth. This has seen energy prices rise, and reaffirms the FMOC rate decision and the forward dot plot. 2017 could be described as the year the central bankers start to move off stage.
3. Currencies: The US dollar continues to crush everything in its path, and the benchmark dollar index has traded clear of the 1.02 resistance, making a high overnight at 1.0356 the highest since 2002 a continuation of the current bullish trend. Our technical price target for the USD basket DXY now sits at DXY 1.077, inferring the pressure will remain on the EURUSD pair which last night traded below the key 1.05 level and briefly thru 1.04 to make a low at 1.0366 to find support back over the key 1.04 level. USDJPY trades at 118.11 the weakening Yen this will lift the Nikkei again as the Japanese goods and services appear cheaper on an exchange rate basis.
4. Gold: Gold marching towards the technical price target of $1100oz last night trading below $1130 a solid $30 move lower form the time of the US rate decision. Australian gold miners are expected to remain under pressure as the spot price looks for price support. The AUD price of Gold also makes a new 2016 low overnight at $1536oz adding pressure to the current equity price levels.
5. Oil: Still the fine balance of supply and available storage levels pushed Oil back to the key $50bl level.
The ASX is set to break through 5900 today. Credit: Peter Braig
6. ASX: The BHP ADR shows the stock opening down at $25.06 with the CBA ADR showing a slightly higher open at $80.99. For the local markets the overnight Index futures suggest an 8 point move higher at open to 5546 points. Our investors will be looking for direction after yesterday's soft employment numbers. With the AUDUSD this morning trading at .7358 as the only offer of support for resources in today's market.
7. Today's diary:
- Overseas data: Euro zone trade balance October, CPI November, Current account October; US Housing starts November, Building permits November
8. Market highlights:
- SPI futures up 6 points to 5491
- AUD -0.6% to 73.61 US cents (overnight low 73.38)
- On Wall St, Dow +0.5%, S&P 500 +0.6%, Nasdaq +0.6%
- In New York, BHP -1.7%, Rio -2.4%
- In Europe, Stoxx 50 +1.2%, FTSE +0.7%, CAC +1.1%, DAX +1.1%
- In London, BHP -3.2%, Rio -2.5%
- Spot gold -1.3% to $US1128.69 an ounce
- Brent crude +0.4% to $US54.09 a barrel
- Iron ore +3.2% to $US81.50 a tonne
- LME aluminium -0.6% to $US1736 a tonne
- LME copper +0.2% to $US5732 a tonne
- 10-year bond yield: US 2.58%, Germany 0.36%, UK 1.48%, Greece 7.15%, Australia 2.87%
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