The ASX Today

It's looking like a quiet start for the ASX following small falls overseas on Friday and an overly excited Australian dollar.

It's looking like a quiet start for the ASX following small falls overseas on Friday and an overly excited Australian dollar.

Australian equities, and the Australian dollar, could be dragged down by large falls across commodities late last week, namely copper and iron ore.

The market lost around 1 per cent last week, sliding for its third consecutive week, and ASX SPI 200 Futures are now indicating the market will open 0.02 per cent lower – shedding just 1 point – to 5667 points.

KEY POINTS

  • Quiet start for the ASX around where it left off
  • No local economic data set for release today, big rollout for the week begins tomorrow
  • No major local stocks going ex-dividend this session
  • Australian dollar hits a US81c high note, but quickly comes up against resistance
  • Oil woes on Hurricane Irma, which made landfall in Florida yesterday

The US dollar is spinning the most concerning story centered on the US economic outlook. The US dollar broke new lows for 2017 against the Japanese yen on Friday. There's been a rally in US 10-year bonds, and a flattening of the bond curve in general to levels not seen since before Trump's election.

The Australian dollar hit its highest note in two years on Friday when it tested US81c. But Westpac strategists still believe it's more likely for the dollar to drop than gain, with forecasts remaining at US78c for this time next week.

After a strong session to round off the week, the Aussie went into reverse Friday night on commodities falling in China and London.

Greg McKenna, chief market strategist at AxiTrader, thinks the Aussie's chart against the greenback looks “awful from a technical perspective” and there is a “room for a decent pullback toward US80c”.

Global oil prices fell around 3 per cent on Friday on the expectation that Hurricane Irma would suppress demand.

This could play with the oil market for sometime. Irma, which has made landfall in Florida Keys, dwarfs its Texas-centric predecessor Harvey and is shaping up to be one of the biggest storms in history by wind speed measured against the duration of the storm.

It's too early to tell how this will translate to Australian equities, but BHP looks likely to open lower by around 10c on early trade figures. Meanwhile, despite a perceived reversal in risk reversion because geopolitics was quiet over the weekend, large cap gold producer Newcrest looks like it will open around that much higher this morning.

Market Summary: 
IndexLast( /-)Change
Dow21,797.7913.010.06
S&P 5002,461.43-3.67-0.15
Nasdaq6,360.19-37.68-0.59
FTSE 1007,377.60-19.38-0.26
DAX12,303.987.350.06

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