Overnight market action was dominated by a response to Chinese GDP, retail sales and industrial production numbers released yesterday.
A clear collective conclusion is that the stronger than expected numbers remove an impediment to US rate rises, following the Fed’s statement that explicitly identified international weakness as a reason to hold off lifting rates in September. This led to a stronger USD, weaker commodity prices and modest gains for shares as markets weighed a better global growth scenario against potentially tighter US monetary policy.
SPI futures are pointing to a flat start for Australian shares. However, local factors could dominate trading. The announcement this morning of proposed legislative changes in response to the Murray inquiry into the financial system will directly impact sectors and stocks today.
Further increases to capital requirements, higher compliance and training standards for financial planners and facilitation of crowdsourcing could all hit bank share prices today. Changes to default superannuation funds could see support for listed fund managers, but the new restrictions on transaction charges could see Cabcharge shares trounced.
In further company news, Cochlear holds its AGM today, but investors are more likely focussed on BHP’s quarterly sales and production report due before market tomorrow.