Local and/or General
Australian investors have a job to do today – resolve the price conflict between yesterday’s strong local jobs numbers and weak international leads.
Overnight action saw European and US shares fall, and copper and oil continue their slide. A higher AUD and further pressure on BHP round out the explanations for the 69 point fall in Australia 200 futures overnight. However, this slide comes despite game-changing employment data yesterday, and any selling today will likely be met, at the least, by solid back foot buying from local investors.
Releases overnight saw German and French inflation stuck near zero, and a fall in Europe wide industrial production for September. Against a background of China growth fears these numbers weighed heavily on continental share trading. They also induced a further souring of industrial sentiment, forcing oil lower to within 5% of its post GFC low.
BHP’s laundry list of woes grew after the company revealed a dispute with the ATO over Queensland coal royalties. Coming on top of the Brazilian mine disaster and pressure over the company’s dividend policy, and against a backdrop of weak commodity prices, BHP shares may go lower before finding support for the globe’s largest listed mining company.
No major data releases today mean the short term fate of the market is in the hands of investors and traders. Analysts will watch trading volumes closely, as an indicator of the commitment of buyers and sellers at current share prices.
Frequently Asked Questions about this Article…
The strong local job numbers are creating a price conflict for Australian investors, as they contrast with weak international market leads. This situation may lead to solid buying from local investors despite the overnight slide in futures.
International markets, such as European and US shares, can significantly impact Australian shares. Recent falls in these markets, along with declining copper and oil prices, have contributed to a drop in Australia 200 futures.
The article suggests that the AUD is rising due to strong local employment data, which contrasts with weaker international economic indicators, influencing investor sentiment and currency valuation.
BHP is dealing with multiple challenges, including a dispute with the ATO over Queensland coal royalties, the aftermath of a Brazilian mine disaster, pressure on its dividend policy, and weak commodity prices.
European economic indicators, such as low inflation in Germany and France and a drop in industrial production, can weigh heavily on global markets by souring industrial sentiment and affecting commodity prices like oil.
Trading volumes are significant as they indicate the level of commitment from buyers and sellers at current share prices. Analysts closely watch these volumes to gauge market sentiment and potential price movements.
Commodity prices are crucial for investors because they influence the profitability of companies involved in resource extraction and production, like BHP. Fluctuations in these prices can impact share values and investor returns.
The decline in oil prices is attributed to a souring of industrial sentiment due to weak European economic data and fears of slowing growth in China, pushing oil prices closer to their post-GFC lows.
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