Morning traders. Thanks @ttward and lounge lizards.
Overnight round-up and day ahead:
A mixed close on Wall Street points to a subdued start to Australian trade after US Federal Reserve officials doused expectations of another rate cut.
The SPI 200 index futures contract eased 15 points or 0.2 per cent to 6447 as volatility continued to abate on global markets. A week that began with three straight 60-plus point swings on the benchmark local index looks likely to end with a whimper. The ASX 200 yesterday edged up 19 points or 0.3 per cent to 6502 as broadly positive company earnings steadied nerves.
US stocks closed little changed after Fed officials walked back expectations that the central bank will cut its target rate next month. While the blue chip companies of the Dow edged up 50 points or 0.19 per cent, the broader S&P 500 shed a point or 0.05 per cent and the tech-heavy Nasdaq gave up 29 points or 0.36 per cent.
Fed voting committee member Esther George told CNBC the central bank should not have cut rates last month and does not need to cut again in September. Non-voting member Patrick Harker said the committee should leave rates at their present level for a while. A second non-voting committee member, Dallas Fed President Robert Kaplan, said he would "like to avoid taking further action". Their comments were at odds with market expectations, which show a 93.5 per cent likelihood that the Fed will cut again next month, according to CME Group's FedWatch tool. Fed Chair Jerome Powell is due to address the Jackson Hole Symposium in the US tonight.
Weak economic news further muddied the outlook. A report last night showed that a measure of US manufacturing strength contracted this month for the first time in a decade. Economists warned that the decline in the Markit manufacturing purchasing managers' index signalled the trade war with China was impacting economic growth.
Industrial metals declined as the US and China showed no signs of concessions in their long-running trade war. China yesterday warned it will retaliate if the US goes ahead with plans announced earlier this month to impose tariffs on $US300 billion of Chinese imports from September 1. Meanwhile, US President Donald Trump said he had to confront China over trade because of the failings of his predecessors. At the London Metal Exchange, copper fell 0.8 per cent, aluminium 0.7 per cent, lead 1.3 per cent, nickel 1.1 percent and zinc 1.9 per cent. Tin was unchanged.
Iron ore clawed back a portion of Wednesday's steep 6.2 per cent loss. Spot ore landed at China's Tianjin port bounced $2 or 2.4 per cent to $US85 a tonne. BHP continued to decline in overseas action. Its US stock lost 0.76 per cent and its UK stock 0.89 per cent. Rio Tinto edged up 0.14 per cent in the US, but gave up 1.1 per cent in the UK.
Gold dropped to a two-week low as volatility continued to abate on money markets. December gold settled $7.20 or 0.5 per cent lower at $US1,508.50 an ounce after US treasury yields improved overnight.
The oil market was weighed down by demand concerns following a soft US weekly inventory report. Brent crude settled 38 cents or 0.6 per cent weaker at $US59.92 a barrel, its first loss in five sessions.
On currency markets the prospect of a halt in US rate cuts lifted the greenback and pressured the local unit, sending the Aussie down a third of a cent to 67.56 US cents.
Looking ahead, all eyes are on Jackson Hole, Wyoming, where Fed Chair Jerome Powell has the difficult task of managing a divided committee and the expectations of a market anticipating a rate cut next month. Powell is due to address the symposium around midnight Australian Eastern Standard Time. The G7 meets this weekend in Biarritz. Back home, profit reports are due today from Afterpay, Alumina, Ardent Leisure, Goodman Group and Iress.
Breakfast
National Waffle Day is not until tomorrow, but why wait?
