The ASX Today

Small gains the ASX was hinting at making earlier this morning could be derailed by more North Korea news.

US markets had a lackluster session with the S&P 500 closing down 0.11 per cent to 2495 points, below the record it hit the other day, and the Nasdaq losing 0.48 per cent. The Dow tried to compensate, finishing up 0.2 per cent. 

Global traders may have been a little spooked by commentary from various central banks yesterday reinforcing the period of quantitative easing is coming to an end.

For whatever reason, SPI traders took overseas news as good news for Australia, perhaps on the back of strong economic data yesterday and on an outlier basis. Local traders added nine points to the ASX SPI 200 Futures index this morning before 7.30am AEST.

Financials, energy stocks and gold producers are looking the most positive. There could be a change in direction for some stocks though, with North Korea reported as firing a missile over Japan airspace at around 8am AEST.

KEY POINTS

• ASX hints at small gains, but these could easily be wiped on another North Korea missile launch
• Geopolitics looks less likely to derail energy and gold stocks at the open
• Aussie dollar sinks on China data and lower metal prices
• No economic data released into the local market today
• Local bank stocks look to round off a solid weak on strong economic data and central bank commentary

Financials have come back in favour this week and are looking at another good morning on macro outlooks outlined by various central banks, which all suggest higher interest rates are on the cards. In the US, bank stocks have been gaining against falling tech stocks. 

Judging from overseas action last night, gains at the open on the ASX seem less likely for ‘pure-play' commodity stocks, potentially with the exception of gold producers and energy companies. BHP is looking to open 1 per cent lower too.

The Australian dollar rose on impressive jobs data yesterday only to then sink on lower metal prices in Asian trade and beyond. This morning the Aussie is at US79.93c.

Al metals lost ground with the exception of gold, which also benefitted from US dollar weakness. Elsewhere in commodities, oil went on a wild ride only to finish with half its session gains – still 0.9 per cent higher for Brent crude – and iron ore was the biggest loser slumping 3.4 per cent.

Another central bank has hinted it's close to a rate hike, with the Bank of England's commentary bringing down the FTSE in London by more than 1 per cent. Officials from Bundesbank, Slovenia Central Bank and the ECB all discussed quantitative easing yesterday too, but some were more vague than others.