The ASX Today

The ASX is indicating it will open marginally lower after weakness around the globe overnight.

ASX SPI 200 Futures closed five points lower earlier this morning. 

US share markets were trading either side of flat, its falls in materials and energy counteracting gains elsewhere. Oil markets have experienced significant activity overnight, coming back from their recent highs.

Australia has little to go off in terms of leads in light of the above, and even fewer reasons to rally, with no economic data slated for release. Falling alongside other large miners in overseas trade, BHP is indicating it will open around 1.3 per cent lower. All Dalian futures markets in China came under pressure overnight, with iron ore, steel and coking coal trading 1.8 per cent, 0.1 per cent and 1.9 per cent lower respectively. 

KEY POINTS

• Australian market again lacking a strong lead for the open today
• Chinese equities come under more pressure, a region to watch for a ripple effect
• Local materials and energy sectors could struggle with lower spot and futures prices today
• No major economic data scheduled for release in Australia

China once again saw heavy selling yesterday, so this may be the region to watch as a trigger for elsewhere. Chinese authorities are currently targeting large companies an questioning their commitment to the quality of countrywide growth. 

China concerns are now having an impact on commodity spot and futures markets. A few days ago, markets weren't reflecting any fears, but now they are being priced in. In addition to metals, iron ore is lower on the Dalian futures exchange too, but it is still higher in New York this morning.

Gold is up $US6 to $US1294, but it did climb above $US1300 an ounce for the first time in six weeks during overnight trade. 

Oil prices drifted back overnight on concerns over the Saudi/Russia negotiations to halt production — traders believe this deal is lacking conviction. Russian oil executives seem to want to lift production. 

WTI oil has fallen 1.29 per cent to $US58.19 a barrel, while Brent crude is at $US63.77 a barrel, which is only a touch lower but accounting for the fact it didn't rally as hard as WTI last week.

The Australian dollar is down slightly at US76.08c again.

Another Republican senator said he objects to the planned tax cuts overnight, a Trump package which international traders will be aware has already been somewhat been priced in to US equities. On the contrary, investment banks have provided more commentary around the matter in recent days, noting it could lift US share markets by 5 per cent.