Weakening share and commodity prices will see the Australian share market open on the back foot this morning, largely due to China data released after market yesterday that fell short of expectations. Increasing the pressure, BHP will likely face further selling after the announcement overnight of an emergency relief fund for those affected by the Brazilian mine disaster. However traders and investors won’t get too carried away ahead of the crucial jobs read late in the morning session.
Industrial production in China grew at 5.6% pa in October, continuing the deceleration faster than the consensus 5.8% forecast. This knocked the wind out of a cautious rally that began late in the Asia Pacific session. Although most European exchanges managed to hang on to gains, a further slump in oil and copper prices pushed US markets into the red.
The increased likelihood of a rate rise in the US has dialled back expectations of a rate cut from the RBA. That could change if today’s employment numbers disappoint for the second month in a row. The focus is the number of jobs created. More than the posited increase of fifteen thousand jobs may see an AUD rally and share buying, whereas a number below zero would deflate both markets.