Another Quiet Night on Overseas Markets

US equity markets were slightly weaker on Monday, with the S&P500 and Nasdaq Composite Indices declining by 0.18% and 0.16% respectively. The S&P500 declined 4.60 points to close at 2544.73.

As noted in Monday’s update, the S&P500, as measured by short-term momentum indicators, is currently heavily overbought, increasing the risk that prices pause at current levels to consolidate. Should prices indeed begin to correct, initial support is located in the 2500 to 2480 range.

European equities were largely firmer, with the DAX30 and EuroStoxx50 gaining by 0.16% and 0.20% respectively, while the FTSE100 in the UK dipped 0.20% to close at 7507.89. The ASX200 rallied on Monday, lifting further away from key support between 5640 and 5660. The Index closed at 5739.26, back towards the upper boundary of the current trading range. While buyers remain committed at current levels, a clear break of 5800 is required to signal the start of a new uptrend.

It was a fairly quiet start to the week in terms of important economic data releases. Chinese PMI came in at 51.4, a decline of a full point from the previous reading in September. Meanwhile, Industrial production data out from the Eurozone was positive, with a month on month increase of 2.6%, taking the year on year growth to August to 4.7%. This was well above market expectations of 3.0%.

The Aussie Dollar continues to push lower, a trend which has been in place since early September. The AUD closed at 77.52 US cents on Monday, well below recent highs of around the 80 US cent mark from only a month ago.

Plenty of Australian companies are paying out dividends this week, including DOW and CNU today, SHL, COH, and FBU on the 11th, BXB, S32, on Thursday, and then QAN, CSL, FLT, SEK, and GNE on Friday. This follows on from a big week of dividends last week, meaning many investors will be finding additional cash in their accounts, ready to put to use.

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