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Safety first

CMC Markets

Investors moved towards safer havens in overnight trading as US earnings disappointed and Britain heads towards a no-deal Brexit. The Japanese yen, bonds and gold all moved higher. Iron ore and steel fell, although energy markets once again went their own way. US shares came under pressure as entertainment giant Disney tumbled.

Mixed results from financial stocks weighed. Wells Fargo and Bank of America missed estimates, although Goldman Sachs earnings were better than expected. The sector dropped more than 1%. The disconnection between the economy and the share market was laid bare by another shocker from United Airlines, and criticism of Disney’s recent staff lay-offs.

The governor of the Reserve Bank of Australia this morning told a business audience that the board was considering the implications of any monetary policy changes. He re-iterated the bank’s concern about the traction of any moves that could take Australian interest rates below zero.

Futures indicate a cautious start to trading ahead of significant data releases. Australian jobs are forecast to fall 40,000 in September, lifting the unemployment rate to 7.0%. Chinese consumer prices are expected to increase by 1.9% for the same period, although analysts are looking for a 1.8% drop in producer prices.


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