Morning Notes

10/12/18 - Argonaut Morning Note

The US dollar fell and Treasuries rallied after November’s employment data showed that the US added fewer jobs than forecast and US wages grew less than anticipated; The boost to steel prices from US metal tariffs is beginning to fade as concerns mount on the possibility that the US – China trade war will erode economic growth; China’s monthly copper imports dropped for the first time this year as demand wanes amid the U.S -China trade dispute; Aluminium prices are expected to see limited upside next year due to growing aluminium supply from China. The Aluminium price was up 0.7% on Friday to US$ 1951/t on the LME; China’s coal imports slumped to the lowest level since Feb. 2017 as the government ordered mainland ports to cut back on the amount of overseas coal shipments received; Oil jumped after OPEC and allied crude exporters surprised traders with a larger-than-expected output reduction of 1.2 million barrels per day to be removed from market in Q1 of 2019. Brent crude gained 2.7% Friday to US$61.67/bbl

read more...

07/12/2018 - Argonaut Morning Note

US financial markets remained volatile overnight as a result of increased fears that the US – China trade truce will not last. The Dow Jones fell 0.3% to 24,948 and the S&P 500 decreased 0.2% to 2,696; The arrest of Huawei Technologies CFO in Canada provoked outrage from China at a critical point in trade talks with the US; The Trump administration is contemplating to remove a key barrier to constructing new coal-fired power plants in the U.S. The Environmental Protection Agency proposed an easing to limits on Carbon dioxide emissions from coal power plants;OPEC has ended talks without a deal on oil production cuts as Russia flexed its muscles by refusing to cooperate with Saudi Arabia’s demands to curb crude production. Brent crude fell 2% overnight to US$ 60.30/bbl; Copper sank to a three-week low and other base metals were mainly down on the LME as the arrest of a Chinese executive threatened further escalation in tensions with the U.S. Copper retreated 1.5% overnight to US$ 6,080/t;  The US trade deficit widened more than expected in October to the highest in a decade, reflecting continued fallout from the trade dispute with China. The US trade deficit increased 1.7% to US$55.5 bn for October from US$55.6 bn in the prior month

read more...

06/12/2018 - Argonaut Morning Note

US markets were closed overnight to honour the late President George H.W. Bush; Oil finished lower following the first phase of talks between OPEC and allied producers regarding crude supply limits. Brent crude fell 0.8% overnight to US$ 61.57 bbl and WTI decreased 0.7% to US$ 52.89 bbl; UK Prime Minister, Theresa May is searching for a compromise on a key vote in parliament next week to avoid a crushing defeat on her Brexit deal; Copper declined overnight on the (LME) as a result of lingering doubts over the credibility of the trade truce between the US and China which impacted demand levels. Copper fell 0.6% to US$ 6,175/t; Credit markets are reportedly entering bubble status, according to Bloomberg as investors begin to chase yield in response to the current volatility of global equity markets

read more...

05/12/2018 - Argonaut Morning Note

US markets plummeted overnight as a result of increased angst regarding the meaningful progress made between the US and China on trade. The Dow Jones fell 3.1% to 25,027 and the S&P 500 decreased 3.2% to 2,700; President Donald Trump’s administration is recommending the U.S. Postal Service increase prices for shipping packages, a move that will hurt online retailers such as Amazon Inc; OPEC and its allies are meet in Vienna this week to discuss production cuts following the largest monthly drop in oil prices in a decade. Brent crude fell 0.7% to 61.25 US$/bbl overnight and WTI gained 0.6% to 53.25 US$/bbl; Copper retreated overnight as a result of increased scepticism over claims that a US- China trade truce will re-ignite demand concerns. Copper fell 1.6% to 6,213 US$/t on the London Metals Exchange; The US gold price gained 0.6% overnight to 1,238 US$/oz as concerns mounted over the US–China trade situation

read more...

03/12/2018 - Argonaut Morning Note

Saturday night’s meeting between U.S. President Donald Trump and Chinese President Xi Jinping was positive overall with no signs of escalation to the U.S. – China trade dispute and further progress made towards resolution, according to Bloomberg; U.S. financial markets will close Wednesday for a national day of mourning to honour former President George H.W. Bush;  Russia and Saudi Arabia have agreed on working together to stabilise the global oil market for 2019, however Moscow and Riyadh are yet to confirm any additional crude production cuts; China has agreed to start purchasing agricultural products from U.S. farmers immediately following a successful meeting between Xi Jinping and Donald Trump Saturday night, according to Bloomberg; Base Metal Prices were mainly up Friday on the London Metals Exchange, zinc gained 3.4% to 2,665 US$/t whilst copper fell only 0.3% to 6,227 US$/t; Australian shares are set to open higher this week in anticipation of local data inclusive of third quarter growth statistics on Wednesday. The ASX All Ords fell 1.5% to 5,749 on Friday.

read more...