Originally published by Rivkin Securities
It has been a volatile week for stocks with the Dow Jones giving back most of the prior day’s gains and falling 1.0%. The announcement of tariffs that US President Trump has imposed on certain products from Canada, Mexico and the EU was not well received by markets. This represents a continuation of the trade wars that Trump started many months ago and it is expected that these countries will now impose retaliatory tariffs on the US. The ASX is expected to follow the US lower this morning with futures down 7 points.
Oil prices were relatively weak overnight despite a decline in US stockpiles of crude. With OECD inventories now below the five-year average it is clear that OPEC has achieved its objective. The price of WTI relative to Brent is now at a three-year low with the spread close to $11. This is reflective of the fact that US oil production has been increasing at a breakneck pace and therefore increasing supply there relative to the rest of the world.
Tonight US employment data will be released which is expected to show 189,000 new jobs created. While this wouldn’t be a particularly large number, it would be an improvement on the prior month’s 164,000 new jobs. Furthermore, the unemployment rate is expected to stay at 3.9%, a very low number by historical standards, and average hourly earnings are expected to climb 0.2%.
Data Releases:
- US Employment Data 10:30pm AEST