Morning traders. Thanks Trees and after-market regulars, especially the ever-reliable Ravgnome.
Market wrap:
A flat open looks likely after US stocks closed modestly higher as the Federal Reserve moderated its guidance for the likely pace of rate rises.
The June SPI 200 futures contract, which expires today, eased four points or 0.1% to 5581 during a choppy finish to last night's session on Wall Street.
The S&P 500 initially rose as much as 0.5% after the Fed updated its rates outlook, but pared its final tally to four points or 0.2% as traders tuned in to the central bank's press conference. The Dow gained 31 points or 0.17% and the Nasdaq nine points or 0.18%.
While the Fed left its key rate on hold and offered no explicit indication when the first rate increase will take place, analysts seized on changes to the central bank's "dot plot", which indicates where the 17 board members expect rates to sit in the years ahead. Whereas in March at least one member expected rates to end this year as high as 1.75%, the latest chart showed no one now expects rates to be higher than 1%. The chart also showed that increases are likely to be more gradual in succeeding years. (See
CNBC here for dot plot comparison and commentary.)
"It looks like there’s a shallower rate hike path for 2016 and 2017,” John Canally, chief economic strategist at LPL Financial Corporation in the US, told
Bloomberg. “That should be supportive of risk assets.”
US rates look likely to rise at least twice before the end of the year, according to the dot plot. The median estimate was 0.625%. Only two of 17 officials favour waiting until 2016 before raising rates. Chair Janet Yellen reiterated that the bank remained data-dependent but expects current "moderate growth" to continue.
Read more here.
The US dollar index slid 0.7%. The Australian dollar was this morning a tenth of a cent higher, buying 77.57 US cents.
Utilities was the best of the eight S&P 500 industry groups that advanced. The Dow Jones Transportation Average declined 0.39% to close perilously near to a technical correction. Traditional Dow Theory maintains that the DJT and Dow Jones Industrial Average should rise together in a healthy market.
Read more here.
BHP gained 1.11% and Rio Tinto 0.6% in US trade despite a fourth straight fall in the price of iron ore. Spot iron ore for import to China yesterday dropped $1.20 to US$60.90 a dry ton.
The NYSE Arca Gold Bugs index bounced 2.39% from Tuesday night's 2015 low as gold rallied during the Fed press conference. Gold for August delivery settled $4.10 or 0.4% in the red at US$1,176.80 an ounce before the Fed news but was lately up $3.60 or 0.3% at US$1,186.60 in electronic trade.
Copper and zinc hit multi-month lows on the London Metal Exchange as caution reigned ahead of the Fed. In London, copper lost 0.1%, aluminium 0.2% and zinc 0.7%. Lead gained 0.2% and tin 0.3%. Nickel closed flat. US copper for July delivery was recently unchanged at US$2.62 a pound.
Oil settled barely changed. West Texas Intermediate crude oil for July delivery eased five cents or 0.1% to settle at US$59.92 a barrel.
Fears of a Greek default continued to cast a long shadow over European markets, which closed before the Fedpolicy statement. The Athex Composite slumped 3.15% to its lowest point since September 2012 after Greek Prime Minister Alexis Tsipras rejected creditors' demands for cuts to pensions ahead of tonight's meeting of eurozone finance ministers. The Stoxx Europe 600 gave up 0.45%, Germany's DAX 0.6%, France's CAC 1.02% and Britain's FTSE 0.44%.
TRADING THEMES TODAY
INDEX EXPIRY DAY: A reminder that the June SPI200 equity index derivative expires today, so there will be fun and games in the pre-open auction queues of member companies of the ASX 200. At times the 'market prices' will likely indicate extreme swings in both directions - no need to panic or open champagne, for these will more or less settle down just before the market actually opens. Once upon a time there were bargains to be had on these quarterly expiry sessions, but like other market anomalies, the instos are onto it. Overseas, Wall Street liked what it heard from the Fed, but not enough for a huge rally. In other words, little changed. Tonight, on the other hand, might turn into a big risk-off session if Greece and its creditors leave a meeting of eurozone finance ministers no closer to a debt deal.
ECONOMIC NEWS: The RBA releases is quarterly economic bulletin at 11.30am EST. European finance ministers meet tonight in Brussels with Greece at the top of the agenda. Highlights in the US include the consumer price index/core CPI, weekly benefit claims, Philly Fed Manufacturing Index, current account and a leading index.
Good luck to all.
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