FINANCIAL MARKET REVIEW FOR JUN 04, 2018 Key data released through the Asian session this morning was on the lighter side, limited to 1st quarter company gross operating profits and April retail sales figures out of Australia. For the Aussie Dollar, Company gross operating profits surged by 5.9% in the 1st quarter, coming in well ahead of a 4th quarter’s upwardly revised 2.8% and a forecasted 3% increase. The mining sector saw gross operating profits rise by 10.9%, the manufacturing sector by 5.5%, the electricity, gas, water and waste services by 11.9%, retail trade by 4.1% and construction by 10.1%, while wholesale trade company gross operating profits fell by 4.6%, with accommodation and food services profits falling by 5.3% and financial and insurance services down by 14.4%. There were also rises across the remainder of the sectors, including a 13.6% rise in administrative and support services. Retail sales rose by 0.4% in April, coming in ahead of a forecasted 0.2% rise, following a flat March, the numbers likely to be of some relief to the RBA. The rise in retail sales was attributed to a 1.3% rise in spending at cafes, restaurants and takeaways, with rises also seen in ‘other retailing’ (0.9%); food retailing (0.3%) and household goods retailing (0.7%), which were partially offset by declines in clothing, footwear and personal accessories (-0.8%) and department stores (-0.9%). The Aussie Dollar moved from $0.75832 to $0.75977 upon release of the figures, with some of the minor stats also a positive for the Aussie Dollar ahead of tomorrow’s RBA interest rate decision and release of the rate statement, business inventories up in the 1st quarter, with job advertisements jumping by 1.5% in April, following the previous month’s 0.3% fall. At the time of writing, the Aussie Dollar was up 0.57% to $0.7612, finding support from this morning’s positive numbers, with the threat of a U.S – China trade war having little impact through the morning, the Japanese Yen down 0.06% to ¥109.61 against the U.S Dollar. In the equity markets, it was a solid start to the week, the Nikkei leading the way up 1.36%, with the Hang Seng, CSI300 and ASX200 all seeing strong starts, with the equity markets showing little fear of a possible trade war, as the markets respond to Friday’s U.S nonfarm payroll and wage growth figures. For the EUR, economic data scheduled for release this morning is also on the lighter side, with key stats limited to unemployment and consumer confidence numbers out of Spain. While the numbers will provide the EUR with some direction, the EUR found support through the Asian session following an easing of geo-political risk in Europe, with the Five Star – League coalition forming government and news of Rajoy’s replacement Sanchez choosing to leave the Podemos out and run with a minatory government providing support, though sentiment could change quickly should the threat of snap elections surface. At the time of writing, the EUR was up 0.27% to $1.1690, today’s stats, trade tariffs and political noise continuing to be the key drivers through the day.
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FINANCIAL MARKET REVIEW FOR JUN 04, 2018 For the Pound, following last week’s better than expected manufacturing PMI number, it’s May’s construction PMI that will be in focus, with forecasts pointing to a slight easing in productivity, which would be a negative for the Pound, while unlikely to have a material influence on sentiment towards monetary policy ahead of tomorrow’s more influential service sector PMI. The Pound was up 0.18% to $1.3370 at the time of writing, with today’s PMI number and Brexit chatter in focus, news and progress on Brexit likely to garner plenty of attention through the week. In the US, economic data scheduled for release this afternoon is limited to April’s factory order numbers that are forecasted to U.S Dollar negative, though following upbeat May private sector PMI numbers out of the U.S last week, the numbers wouldDear need to be quiet dire to weigh heavily on the Dollar. Mr.Benitez, With the stats on the lighter side, the markets will be looking towards the U.S administration for updates on trade and whether tariffs will be introduced on Chinese goods imported into the U.S, the chatter from the weekend certainly suggestive of an imminent trade war that would do very few favours for the Dollar. At the time of writing, the Dollar Spot Index was down 0.17% to 93.997, with noise from China and the Oval Office the key drivers through the day. View our full economic calendar for a daily roundup of major economic events.
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