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Australian shares are set to open higher, rebounding from Tuesday's trading losses, which were a knee-jerk reaction to North Korea's missile test over Japanese territory.
Markets at 7:30am (AEST):
- ASX SPI 200 futures +0.5pc at 5,661, ASX 200 (Tuesday close) -0.7pc at 5,669
- AUD: 79.51 US cents, 61.53 British pence, 66.42 euro cents, 86.20 Japanese yen, NZ$1.10
- US: Dow Jones +0.3 at 21,865, S&P 500 +0.1pc at 2,446, Nasdaq +0.3pc at 6,302
- Europe: FTSE -0.9pc at 7,337, DAX -1.5pc at 11,946, Euro Stoxx 50 -1pc at 3,388
- Commodities: Brent crude +0.2pc at $US51.97/barrel, spot gold flat at $US1,309/ounce, iron ore -1pc at $US76.36/tonne
Asian and European markets were similarly rattled by this latest escalation of geopolitical tension, and gold — the traditional safe-haven asset — rose to a nine-and-a-half-month high.
Australia today
ASX futures have risen by half a per cent, which (combined with Wall Street's stronger close) indicates that the local share market will likely open higher.
Several companies will report their financial results today, including Boral, Macquarie Atlas Roads and Ramsay Healthcare.
The Bureau of Statistics will release two sets of economic data today — construction work done in the second-quarter and July building approvals.
"Our team expects growth of 1.8 per cent quarter over quarter [for construction work done], which appears slightly firmer than the consensus estimate," wrote Deutsche Bank economist Phil Odonaghoe.
Indeed, according to economists polled by Reuters, construction work done is expected to rise by 1 per cent.
NAB's director of economics, David de Garis, is also predicting 1 per cent and noted, "Weather effects from Cyclone Debbie likely curtailed activity in the first-quarter and there could be some payback/catch-up in the second-quarter, aside from the underlying trend."
As for last month's building approvals, the consensus view (according to Reuters-polled economists) is that it will fall by 5 per cent, giving back some of a surprisingly strong June result.
Wall St shrugs off geopolitical concerns
Wall Street began its trading day with deep losses. The Dow Jones Industrial Average, in particular, plunged by more than 100 points in response to the North Korea missile test.
"The world has received North Korea's latest message loud and clear. This regime has signalled its contempt for its neighbours, for all members of the United Nations, and for minimum standards of acceptable international behaviour," said US President Donald Trump said in a statement released by the White House.
"Threatening and destabilizing actions only increase the North Korean regime's isolation in the region and among all nations of the world. All options are on the table."
Although US markets began their trading day with heavy losses, Wall Street eventually managed to finish in positive territory after investors shrugged off the geopolitical risk.
"The 'risk off' sentiment that overshadowed markets after the launch of yet another missile from North Korea didn’t even last 24 hours," Mr de Garis noted.
The CBOE Volatility Index (VIX), which measures fear in the US market, briefly rose more than 20 per cent. By the end of the trading day, it held about 4 per cent higher.
Although Wall Street finished higher, most US sectors ended the day with trading losses — with the exception of technology shares.
The US market also benefited from some positive consumer confidence data.
According to figures released by the Conference Board, headline consumer confidence data rose 2.9 points to 122.9 — its second-highest reading since 2000.
Topics: stockmarket, currency, company-news, economic-trends, money-and-monetary-policy, australia