05 September 2017 Day Trading Pre Market

Good Morning Fellow Traders,

The Australian share market has closed lower, in line with sentiment across Asian markets, after North Korea's weekend test of a nuclear bomb unnerved investors and sparked a surge in safe havens such as gold.

The benchmark S&P/ASX200 index finished down 0.39 per cent at 5,702 points on Monday with almost all sectors lower, save for gains in property trusts and a near-flat finished for telcos.

Investors are weighing the US response to North Korea's test of a hydrogen bomb and are also uncertain about the way China will react, Patersons Securities economist Tony Farnham said.

"US President Donald Trump has said there will be more sanctions and people are now trying to work out what will happen next," Mr Farnham said.

"Will China get tougher on its mate? People are just unsure which way the dice will roll."

He said local economic data for the June quarter out on Monday did not affect the market or the local currency but would have consequences for the upcoming economic growth figures.

The Australian Bureau of Statistics' business indicators data showed that inventory levels fell 0.4 per cent in the quarter, compared to expectations of a 0.3 per cent decrease.

"Inventory numbers missed expectations and they are expected to be a drag on the GDP numbers," Mr Farnham said.

The data also showed wages growth was robust with seasonally adjusted wages up 1.2 per cent in the June quarter.
Australia's June quarter gross domestic product data is due on Wednesday.

On the local market, Commonwealth Bank was the worst performer among a lower banking sector as it announced a board reshuffle, which comes as the bank dealt with an initial directions hearing on allegations from regulator AUSTRAC that it breached anti-money laundering and terror funding laws.

The major miners were mixed with BHP Billiton up 0.2 per cent to $27.48, while Rio Tinto declined 0.9 per cent to $67.68 and Fortescue Metals dropped 1.2 per cent to $5.88.

Gold miners gained amid the risk-off mood with Newcrest up five cents to $23.32, Regis Resources up 1.2 per cent to $4.25 and Evolution Mining adding four cents, or 1.6 per cent, to $2.50.
The spot gold price was close to a year high at $US1,337.55.

Among other stocks, Ardent Leisure fell one per cent to $1.93 after the embattled theme parks operator staved off a planned shareholder vote on Monday by ending a long-running battle and inviting two rebel shareholders onto its board.

A number of companies were trading ex-dividend on Monday, including packaging company Amcor and media group Nine.

Meanwhile, the Australian dollar is higher against the greenback ahead of key economic data later this week and Tuesday's interest rate decision, in which the Reserve Bank is expected to keep the cash rate on hold.

At 1700 AEST, the local currency was trading at 79.53 US cents, from 79.33 US cents on Friday.

ON THE ASX:
* At the close, the benchmark S&P/ASX200 was down 22.6 points, or 0.39 per cent, at 5,702 points.
* The broader All Ordinaries index was down 22.3 points, or 0.39 per cent, at 5,763.8 points.
* The September SPI200 futures contract was down 25 points, or 0.44 per cent, at 5,676 points.
* National turnover was 2.15 billion securities traded worth $4.22 billion.

CURRENCY SNAPSHOT AT 1700 AEST:
One Australian dollar buys:
* 79.56 US cents, from 79.33 on Friday
* 87.0835 Japanese yen, from 87.41 yen
* 66.85 euro cents, from 66.74 euro cents
* 61.39 British pence, from 61.45 pence
* 111.03 NZ cents, from 110.87 cents

GOLD:
The spot price of gold in Sydney at 1700 AEST was $US1,337.55 per fine ounce, from $US1,318.38 per fine ounce on Friday.

BOND SNAPSHOT AT 1630 AEST:
* CGS 4.50 per cent April 2020, 1.891pct, from 1.9166pct
* CGS 4.75pct April 2027, 2.573pct, from 2.6083pct
Sydney Futures Exchange prices:
* August 2017 10-year bond futures contract at 97.38 (implying a yield of 2.62pct), from 97.34 (2.66 pct) on Friday
* August 2017 3-year bond futures contract at 98.03 (1.97pct), from 97.99 (2.01pct).
(*Bond market closes taken at 1630 AEST previous local session; currency closes taken from 1700 AEST previous local session)

From London - Stocks and the dollar fell on Monday while the Japanese yen, gold and sovereign bonds rose after North Korea’s most powerful nuclear test to date dampened investor appetite for risk.
Sunday's test, and reports from Seoul that Pyongyang was preparing for another missile launch, sparked warnings from Washington and drove South Korea's stock market .KS11 1.2 percent lower. Japan's Nikkei .N225 lost almost 1 percent.

With Wall Street closed for the Labor Day holiday at the start of a week likely to become increasingly dominated by a number of central bank meetings, the fall in European stocks was less marked.
The pan-European STOXX 600 index lost 0.4 percent, led by a 0.7 percent fall in banks .SX7P.
“The markets’ reaction seems similar to when missile launches have taken place in the past. Investors sell stock, rush to safe havens, assess the situation, and then buy the dips as tension eases,” said Hussein Sayed, chief market strategist at brokers FXTM.

The dollar, down 0.3 percent against the basket of currencies used to measure its broader strength, fell 0.6 percent to 109.60 yen JPY=, having been as low as 109.22 and off a whole yen from late on Friday.
Investors tend to buy the yen in time of political or market tension on expectations Japanese investors will over time repatriate their money.

The Swiss franc CHF=, also viewed as a safe place to park money, rose 0.8 percent to 0.9579 per dollar.
Driven by the Korean losses, MSCI’s broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS slipped 0.7 percent.

Yields on German government bonds, regarded as among the world’s lowest-risk assets, fell slightly. Benchmark 10-year yields DE10YT=TWEB were down 1 basis point at 0.37 percent while two-year yields DE2YT=TWEB dipped a similar amount to minus 0.76 percent, their lowest since April.
Safe-haven gold XAU= was up 0.8 percent at $1,336 an ounce, having risen to $1,339.47, its highest in nearly a year.
Tom Kendall, head of precious metals strategy at ICBC Standard Bank, saw potential for gold to rally further.

Source: Netwealth Morning Business Roundup

A bright and sunny breakfast of smoked salmon and scrambles eggs and pineapple juice to drink.



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