ASX starts the week on a positive
ASX 200 ought to open higher this morning following in the footsteps of its December futures contract, which has climbed +25pts in start-of-the-week trading. We expect positive sentiment to carry over from Friday’s equity risk rally on better than expected US employment figures and US-China Bloomberg headlines. From all reports, sparring powerhouses US and China had reached an “in principle consensus”, though it remains unknown where the location of a “phase 1” trade deal signing will be with the latest indication from Trump suggesting it could take place in Iowa.
Oct. Pivot levels.
Upside: 6725, 6770
Downside: 6625, 6610
Aussie Retail Sales point up
A mostly quiet G10 calendar today with only Australian retail data up ahead at 11.30am AEDT. There are two measures we pay particular attention to in Sep. Retail Sales m/m and Q3 Retail Trade q/q. Both should work into some mild AUDUSD price action though are unlikely to factor into any RBA November considerations, which is widely expected to result in an RBA hold. Not to say, however, that they won’t be flagged for the RBA’s Dec. rate decision given the implications of retail spending on housing consumption, and in turn, household disposable income.
Sep. Aussie Retail Sales m/m is forecast to print 0.5%, an improvement on August’s reading of 0.4% and in line with the consensus that the start of Spring tends to see better retail spending in general. Q3 Retail Trade q/q is also expected to catch a gain of 0.2%.
Alibaba displays strong growth
Alibaba’s 2Q results powered a 2% rally in the share price on Saturday on solid volume after showing a 40% rise in quarterly revenue and beating analyst expectations across the board. Its earnings bode well ahead of the widely anticipated annual Single’s Day shopping bonanza in November. The e-commerce behemoth which last traded at US$176.46 sits at the top of a year-long bullish wedge formation. A break-out above US$180 combined with a broader risk rally could see Alibaba retest year highs of ~US$195.
