ASX 200 opens with no Wall Street lead as KOSPI jumps 4.61% and copper hits a three month high

Sentiment: mixed ASX 200 futures: -4 points (about -0.04%)

US cash equities stayed shut for Labor Day, so the ASX 200 starts Tuesday from Monday's 9,010.9 close with no fresh Wall Street mark and S&P e-mini futures at 7,705.75, down 0.21% across the shortened holiday session. South Korea's KOSPI closed Monday up 4.61% at 6,995.39, and SK Hynix rose 8.26% to 1,783,000 won after analysts put its 1c DRAM output at about 34% of capacity by the December quarter against Samsung's 31%. Brent added 1.05% to US$97.29 and copper settled at a three month high of US$6.725 a pound, while gold fell 0.49% to US$4,454.80 an ounce.

Overnight drivers

• US cash equities did not trade: the NYSE, Nasdaq and the Treasury market observed Labor Day, the second AU session in a row to open without an overnight US close behind it. S&P e-mini futures finished the shortened session at 7,705.75, down 0.21%, and Nasdaq 100 futures at 29,556.25, down 0.03%. Local direction today comes from the Australian and Chinese data slate instead.
• Philadelphia Semiconductor Index +3.38% to 11,735.26 on Friday: MRVL.US +7.05%, MU.US +6.10%, AMD.US +4.69% and TSM.US +2.85% all rose on the day the S&P 500 fell 0.38%. That split carried into Asia on Monday, with the KOSPI +4.61%, the Nikkei 225 +2.12% to 66,399.84, Samsung Electronics +5.68% and SoftBank +11.22%. No large cap ASX name carries the semiconductor theme, and the local Information Technology index fell 2.60% on Monday as XRO.AU dropped 3.94%, TNE.AU 3.89% and WTC.AU 3.79%.
• Brent US$97.29 (+1.05%) and WTI US$92.66 (+1.29%): WTI's highest close in three months, and Brent's fourth gain in five sessions. ASX energy priced part of that on Monday with the sector index up 1.78%: WHC.AU +7.03%, NHC.AU +4.10%, YAL.AU +3.92%, STO.AU +1.71% and WDS.AU +1.57%.
• Gold US$4,454.80/oz (-0.49%) against copper US$6.725/lb (+0.64%): the gold miners ETF GDX.US fell 2.20% on Friday and bullion has not recovered since. AU producers closed Monday split, NST.AU +0.52% against EVN.AU -1.39%, GMD.AU -0.85%, CMM.AU -0.74% and NEM.AU -2.31%. S32.AU and SFR.AU fell 0.96% and 0.53% on Monday, before copper set its three month high.

Wall Street: no cash session

• S&P 500 futures (ES): 7,705.75 (-0.21%)
• Nasdaq 100 futures (NQ): 29,556.25 (-0.03%)
• S&P 500, Friday 4 September close: 7,718.60 (-0.38%)
• Nasdaq Composite, Friday close: 26,506.99 (-0.29%)
• Dow Jones Industrial Average, Friday close: 53,414.25 (-0.51%)

Europe traded a full session and finished near flat. The FTSE 100 fell 0.08% to 10,822.13, the DAX fell 0.15% to 26,006.53 and the CAC 40 rose 0.33% to 8,306.15. The US 10 year Treasury yield has not printed since Friday's 4.784%, so August payrolls of 162,000 against a 53,000 consensus, with the unemployment rate steady at 4.1%, remain the last US macro input the local market has had to price. The next one is the August US CPI release on 11 September, five days before the 15 to 16 September FOMC meeting.

Commodities and FX (AU relevant)

• Gold: US$4,454.80/oz (-0.49%)
• Brent: US$97.29 (+1.05%)
• WTI: US$92.66 (+1.29%)
• Copper: US$6.725/lb (+0.64%)
• Iron ore 62% Fe: Singapore futures traded above US$100 a tonne on Monday, reaching US$101.10, the first time in seven weeks. The CME TSI contract last settled at US$99.57 on Friday and did not trade on the US holiday.
• AUD/USD: 0.7221 (+0.22%)

Iron ore's move above US$100 followed tighter Chinese coking coal supply and lower port inventories, and BHP.AU, RIO.AU and FMG.AU added 1.09%, 0.83% and 3.19% on Monday before that level was confirmed. Gold has fallen in two of the past three sessions, so AU producers hold Monday's prices against a lower bullion mark.

Key themes for ASX open

• Energy: the S&P/ASX 200 Energy index closed Monday at 11,069.2, up 1.78%, its strongest session in three weeks. WDS.AU, STO.AU, ORG.AU, WHC.AU, NHC.AU and YAL.AU open against Brent's US$97.29.
• Iron ore and diversifieds: the S&P/ASX 300 Metals and Mining index rose 0.37% on Monday to 8,752.0. China's August trade balance at 1:00pm AEST is the next hard number for BHP.AU, RIO.AU, FMG.AU and MIN.AU.
• Gold: NST.AU, EVN.AU, GMD.AU, CMM.AU and NEM.AU face a bullion price 0.49% lower than the one their Monday closes were struck against, with NEM.AU already down 2.31% on Monday.
• Technology: the S&P/ASX 200 Information Technology index closed Monday at 1,761.4, down 2.60%, on the day Samsung Electronics rose 5.68% and SK Hynix 8.26%. XRO.AU, WTC.AU and TNE.AU have now given back about 11% as a sector over two weeks.
• Ex dividend: five ASX 200 names trade without their dividend today, AUB.AU, BSL.AU, MIN.AU, NWS.AU and SIQ.AU. MIN.AU goes ex 83 cents fully franked, payable 30 September, against a Monday close of $63.06.

Economic calendar today (AEST)

• 09:50: Japan Q2 GDP final and July current account
• 10:30: Westpac consumer confidence, September
• 11:30: NAB business survey, August
• 13:00: China August trade balance, exports and imports
• 13:20: RBA Hunter speech
• 19:30: RBA Hauser speech

What to watch

• Breadth on Monday was 109 advancers against 120 decliners across the 250 largest ASX names, so the index gained 5 points on weight rather than participation.
• Ingenia INA.AU closed Monday at $4.19, up 14.79%, after rejecting a $4.75 per security cash proposal from Warburg Pincus conditional on dropping its Peet PPC.AU acquisition; PPC.AU fell 7.37% to $1.76.
• The KOSPI closed Monday five points short of 7,000, and Korean and Japanese cash markets trade through the AU session today.

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