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.