Local shares are poised to open lower after weaker than expected US growth data and a timing check on the Fed’s plan to lift US rates while the price of iron ore dove sharply.
What you need2know
SPI futures down 43pts to 5784
AUD at 80.17 US cents, 95.49 Japanese yen, 72.16 Euro cents and 51.97 British pence
On Wall St, S&P 500 -0.4%, Dow -0.4%, Nasdaq -0.6%
In Europe, Stoxx 50 -2.7%, FTSE -1.2%, CAC -2.6%, DAX -3.2%
Iron ore slumped 4.6% to $US57.13 per tonne
Spot gold down $US7 or 0.6% to $US1205.17 an ounce
Brent crude up 91 US cents or 1.4% to $US65.55 a barrel
What’s on today
Australia export and import prices; private sector credit; Bank of Japan outlook report; US personal income, employment costs.
Stocks in focus
ASX: Goodman Group third-quarter update, Mirvac third-quarter update, production reports are expected from Drillsearch, Grange Resources, Mineral Resources, OceanaGold, Origin Energy, Paladin Energy, Resolute Mining, Western Areas.
RBC Capital Markets has a “sector perform” on Beach Energy and a price target of $1.25 a share.
Goldman Sachs is keeping a “neutral” recommendation on alternative medicine company Blackmores and raised its 12-month price target by 8.6% to $53 a share.
The US dollar has fallen, extending its longest streak of losses since August 2013, on speculation that signs of dimming economic growth will slow the Federal Reserve’s on its path to higher interest rates.
The Bloomberg Dollar Spot Index, which tracks the US currency against 10 major peers, dropped 0.5% to 1165.32 as of 4.01pm in New York. It dropped as much as 1% earlier and fell for a sixth straight day.
The US dollar has gained 16% during the past 12 months, according to the Bloomberg Correlation-Weighted Index, driven by projections the Fed will raise interest rates this year, while central banks around the global add to monetary stimulus.
Iron ore’s week-long price rally has come to an abrupt end, with the commodity shedding more than 4 per cent on Wednesday. Iron ore at the Port of Qingdao fell $US2.75 to $US57.13.
Oil prices have hit the highest this year after the first crude stock draw in five months at the US Cushing, Oklahoma hub suggested an oil glut may be starting to ease. US crude futures are poised to end April up nearly 23% and Brent almost 20% higher, the biggest monthly gains since May 2009 when the global economy was starting to rebound from the financial crisis.
Spot gold fell to a session low of $US1201.13 after the Fed statement before bouncing back. In China, the second biggest gold consumer, premiums eased to about $US1 an ounce on Wednesday over the global benchmark, from $US2 to $US3 in the previous session.
US stocks ended lower on Wednesday as the Federal Reserve cited weakness in the US economy and data showed US growth slowed more sharply than expected in the first quarter. But the Fed’s acknowledgement of weakness in some sectors of the economy makes it more likely it will not be ready to raise until at least September, which kept stocks from falling further.
Twitter fell 8.9% to $US38.49, a day after the company cut its full-year forecast due to weak demand for its new direct response advertising.
Wynn Resorts shed 16.6% to $US108.77 after the casino operator reported weaker-than-expected first-quarter profit.
Salesforcem jumped 11.6% to $US74.65 after a Bloomberg report that it is working with financial advisers to help field takeover offers after being approached by a potential acquirer.
Europe’s main stock markets have closed lower. In London, miners lit up the fallers board as investors fretted over heavy falls for copper prices. Antofagasta shares fell 2.2%, BHP Billiton shed 1.6% and Rio Tinto dropped 2.2%.
British bank Barclays saw its share price slide 1.70 per cent to 256.95 pence on the back of a grim results statement.The scandal-hit lender warned that fines linked to its alleged role in foreign exchange market rigging could top £2.0 billion after posting plunging first-quarter net profits.
The yield on 10-year German bunds climbed to a six-week high as rates surged on debt from the Netherlands to Spain and Italy. Germany got bids of €3.649 billion at a five-year note auction, short of its €4 billion target. Adding to the supply pressure, Italy auctioned €8.25 billion of debt on Wednesday, while Portugal began selling 10- and 30-year bonds via banks.
What happened yesterday
The local sharemarket fell sharply as investors sold off bank stocks, the $A surged higher and Goldman Sachs warned that the nation’s credit rating was at risk. The S&P/ASX 200 Index shed 109.9 points, or 1.85pc, to 5838.6.