European markets were steady after the conclusion of US Debt-ceiling negotiations last week, while a rise in commodity prices helped ASX close higher on Monday.
United States
The US markets remained closed on Monday on account of Memorial Day. The futures market practiced cautious optimism in the context of the recent agreement on debt-ceiling negotiations, with contracts for the S&P 500 and Nasdaq 100 rising above 0.3% each. Although President Joe Biden and House Speaker Kevin McCarthy had both expressed confidence of their recent agreement passing through congress.
Investors will now be reverting their attention to concerns over cash rate decisions by the Fed. Dan Suzuki , the Chief Investment Officer at Richard Bernstein commented, “With the distraction of the debt ceiling fading into the background, investors can now refocus their attention on the underlying fundamentals. One concern, though, is that the fundamental picture remains precarious.” Trader focus will be on regional bank presidents expected to speak later in the week, including Thomas Barkin of Richmond and Patrick Harker of Philadelphia, as well as Fed Board member Philip Jefferson.
Europe
The Euro STOXX 600 Index closed -0.17% lower at the end of trading on Monday. Energy and utilities were the only sectors closing in the green, edging up 0.14% and 0.12% respectively. The biggest underperformer was information technology which slid by -0.57%, followed by consumer discretionary which lost -0.39% and the financial sector declined by -0.28%. The CAC was down by -0.21% while the DAX lost -0.20%. In Spain, the Prime Minister Pedro Sanchez called for a surprise snap election, following heavy losses in regional and local elections, leading to the index underperforming. The yield on the Spanish and German 10-year bonds dropped 11 basis points each to 3.48% and 2.43% respectively. Meanwhile in Turkey, Recep Tayyip Erdogan won a presidential runoff election on Sunday, making him the nation’s longest-serving leading. The UK markets remained closed on account of a public holiday.
*Note: These prices are based on futures and/or CFD pricing and may therefore differ slightly from spot pricing.
Australia
The ASX is expected to open lower today, as ASX futures were down by -0.18% to 7224. The ASX 200 Index rose by 0.88% on Monday to close at 7217.37. Nine out of the eleven sectors closed in the green. Real estate rose by 1.88%, the financial sector added 1.22% while materials was up 1.10%. Consumer discretionary and information technology were the underperforming sectors, declining by -0.59% and -0.36% respectively. Rising iron ore prices led to gains for miners, BHP was up by 1.4%, while Rio Tinto and Fortescue Metals Group added 1.2% each. In banking, Commonwealth Bank was up 1.4%, NAB firmed 1.3%, while ANZ and Westpac rose by 1.2% each. AMP’s shares rose 1.9% after announcing a restructuring of the company’s management, which included the CFO retiring and Chief Executive of the wealth management business leaving due to the sale of the division. Oil prices boosted the energy sector, Karoon Energy gained 1.5%, Beach Energy firmed 1.1% and Woodside added 1%. In individual stocks, the star performer was Brainchip Holdings, gaining 4.65%, meanwhile IDP Education plummeted -15.92 after Canada announced it would allow competitors to enter the student-direct-stream component of student visas. The yield on the Australian 10-year bond was 3.70%, and the local currency strengthened by 0.4% against the US dollar to 0.65.
Commodities
In commodities, oil prices rose with WTI and Brent Crude up by 0.51% and 0.16% to $73.04 and $77.07 respectively. In precious metals, the price of spot gold fell by -0.17% to $1,943.19, while the price of spot silver slid by -0.50% to $23.18. In industrial metals, copper jumped 2.60% to $367, nickel slipped -0.16% to $21,080, while SGX Iron Ore climbed 5.13% to $100.58. Meanwhile, the price of bitcoin was 0.4% higher to $27,685.
Economic Calendar
30th May 2023
New Zealand Building Permits (MoM April) 08:45
Japan Unemployment Rate 09:30
Australia Building Permits (MoM April) 11:30
Spain Inflation Rate (May) 17:00
Switzerland GDP Growth (Q1) 17:00
EuroZone Consumer Confidence 19:00
EuroZone Economic and Industrial Sentiment 19:00
US Housing Pricing Index 23:00
31st May 2023
US CB Consumer Confidence (May) 00:00
This article was written by James Woods, Portfolio Manager, Rivkin Securities Pty Ltd. Enquiries can be made via info@rivkin.com.au or by phoning +612 8302 3632.
