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Markets Live: Brighter day for ASX

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The ASX will move its equity markets settlement and clearing system onto blockchain-inspired technology being developed by a New York start-up run by Blythe Masters.In an announcement that will be of significant interest to global exchanges and the technology industry, ASX said on Thursday morning it was comfortable replacing its ageing CHESS system with a new one using distributed ledger technology (DLT).The exchange has not specified the timing for the move.The technology is being developed by Digital Asset Holdings, in which ASX has an equity stake, and is run by Ms Masters, a former JP Morgan investment banker.Distributed ledger technology operates like a blockchain but does not require transactions to be confirmed by an external network of computers. It will replace the central ledger operated by CHESS with a synchronised one, held on the systems of each market participant. This computer architecture creates a single source of the true state of the ledger.ASX believes it will create efficiencies for market participants by removing the need for records to be reconciled against a central system. Costs could be saved, once the system is operating, by reducing headcount for back office reconciliation roles.Dominic Stevens, ASX managing director and CEO, said in a statement the DLT system “will enable our customers to develop new services and reduce their costs, and it will put Australia at the forefront of innovation in financial markets.”“While we have a lot more work still to do, today’s announcement is a major milestone on that journey,” he said.ASX deputy CEO Peter Hiom said ASX “has formed a strong partnership with Digital Asset over the past two years, and we’re confident we have chosen the right partner.”Shares are inching higher in early trading, with gains in consumer staples companies working to offset more losses in the mining sector.The S&P/ASX 200 index added 4 points, or 0.1 per cent, to 5950 while the All Ordinaries rose 3 points, or 0.1 per cent, to 6033. The Australian dollar traded at US75.63 cents.US stocks didn’t provide Australian investors with much of a lead after a choppy session on Wall Street saw the major benchmarks put in a flat performance.Copper recovered a bit of ground after falling sharply this week but iron ore prices dropped along with Chinese steel futures.Miners were lower again in Australian trading, after losing ground yesterday on the copper price sell off. South32 lost 1.5 per cent, BHP edged down 0.2 per cent, Newcrest slipped 0.4 per cent, Galaxy Resources declined 2.9 per cent and Orocobre lost 2.2 per cent.Heavyweights gaining ground today included supermarket group Woolworths, up 0.3 per cent, and telecom group Telstra, also higher by 0.3 per cent.Metals are a focus this week after copper’s spectacular slide.On Wednesday, aluminum fell for a third straight day to the lowest in almost four months as traders reassessed bets on tightening supplies and rising Chinese demand that have fuelled a rally in metals.China’s pollution cleanup is weighing on economic growth this year while a cooling property market will damp investment into 2018, according to a Bloomberg survey. The country is the biggest buyer of industrial metals.A strengthening dollar,which makes raw materials priced in the greenback more expensive to holders of other currencies, also pinched prices.Aluminum, one of the best-performing commodities of 2017, is wavering as signs that China’s growth is slowing fuel concerns about demand just as doubts grow about the Asian nation’s plans to reduce smelter production.Those concerns have rippled through the London Metal Exchange this week, with the bourse’s main gauge dropping by the most in a year on Tuesday.“Yesterday’s sharp decline has no doubt prompted us to reevaluate our bullish bias toward the market going into year-end,” Edward Meir, an analyst at INTL FCStone in New York, said in a note to clients on Wednesday.Aluminum for delivery in three months fell 1.6 per cent to settle at $2,019 a metric at 5:50 p.m. in London. Prices slumped earlier to $2,015.50, the lowest since Aug. 9.Nickel, tin and zinc also fell.Copper rose 0.1 per cent after a 4.1 per cent slump on Tuesday, the biggest loss in more than two years.Lead advanced on the LME on Wednesday.”Long liquidation continues with sell pressure re-emerging,” Alastair Munro, an analyst at Marex Spectron, said inan emailed note.The Australian dollar’s latest slide has pared its year-to-date advance against the greenback to less than 5 per cent, and the outlook for the local currency is unclear.The Aussie was 0.6 per cent lower at US75.64¢ at about 6am AEDT, near its overnight low. The retreat is in keeping with a volatile month of trading in which the dollar has shed 1.7 per cent.The latest move came after a slight miss in the headline third-quarter GDP data on Wednesday.Gross domestic product rose 0.6 per cent in the September quarter from the previous three months, when it rose by a revised 0.9 per cent (from a previously reported 0.8 per cent), the Australian Bureau of Statistics said.From a year earlier, growth rebounded sharply to 2.8 per cent, from 1.8 per cent in the June quarter – after the impact of a 0.5 per cent contraction in the September quarter of 2016 fell out of the annual calculation. Economists had forecast GDP growth of 0.7 per cent and 3 per cent respectively.The Australian dollar remains “the laggard in the dollar bloc”, according to TD Securities’ global strategy team, which expects the Australian dollar to lose value against both the New Zealand and Canadian dollars “near term”.“The weak GDP report overnight offset the balanced tone from the RBA, bogging it down ahead of US76¢. The report sits in line with the RBA’s growth expectation but fits the narrative that the bank will remain on hold well into 2018,” TD said.SPONSORED POSTHere’s IG’s Chris Weston on key market moves overnight and what to expect today: Broader Asian trade turned a touch sour yesterday, with the Nikkei 225 and Hang Seng closing down 1.9 per cent and 2.1 per cent respectively and signs of volatility creeping back into Asian equity markets.We saw focus placed on tighter financial conditions in China, with the PBoC choosing to withdraw liquidity from the system and stepping back from its regular use of reverse repos. A theme to watch in the session ahead as it could promote volatility in China sensitive assets.Aussie SPI futures are actually indicating a positive feel to the ASX 200 open, with SPI futures sitting at 5948 at 4.10pm (and the close of the ASX 200) and now residing at 5974. So our call is for the ASX 200 to open closer to 5968 and one suspects Aussie banks should put in the points, with the financial sector likely to be up some 0.5 per cent or so.The AUD has been one of the weaker plays in G10 FX markets, joining the CAD and SEK, with some focus on the Bank of Canada rate decision and the somewhat cautious language which has eased the CAD back a touch here.AUD/USD has traded lower into $0.7557 and again it’s the bond market that everyone is focused on, with the yield differential between Aussie treasuries and US treasuries narrowing a touch.The market really didn’t like the Aussie Q3 GDP print, specifically the consumer spending element, which was the weakest quarter since Q4 2008. All eyes on China today and whether they again allow liquidity to ebb out of the market.Read more hereAll the overnight market action in numbers:SPI futures up 17 points or 0.3% to 5968AUD -0.5% to 75.63 US centsOn Wall St: Dow -0.1%, S&P 500 flat, Nasdaq +0.2%In New York, BHP -0.6% Rio +0.6%In Europe: Stoxx 50 -0.3%, FTSE +0.3%, CAC flat, DAX -0.4%Spot gold -0.1% to $US1264.18 an ounceBrent crude -2% to $US61.61 a barrelUS oil -2.3% to $US56.32 a barrelIron ore -3.4% to $US69.36 a tonneDalian iron ore -2.6% to 520.5 yuanSteam coal +0.6% to $US97.10, Met coal +1.8% to $US226.00LME aluminium -1.7% to $US2018 a tonneLME copper +0.1% to $US6550 a tonne10-year bond yield: US 2.32%, Germany 0.29%, Greece 4.74%, Australia 2.50%On the economic agenda today:AiG performance of construction NovemberTrade data OctoberGerman industrial production OctoberUK Halifax house prices NovemberStocks to watch:Regional Express Holdings reinstated at hold at APP SecuritiesRio Tinto upgraded to hold at MorningstarTassal Group downgraded to underweight at JPMorganTegel Group cut to neutral at First NZ CapitalTPG Telecom upgraded to hold at Morgans FinancialWoodside upgraded to buy at MorningstarWall Street turned weary on Wednesday, with a slide in energy stocks and Home Depot offsetting gains in the technology sector..The Nasdaq had slipped 1.6 per cent in the past three days, its worst such fall in more than three months amid doubts over stretched valuations and the impact of a US tax overhaul on corporate earnings.Investors are evaluating the details of the new tax code as the Senate Republicans attempt to reconcile their version of the bill with that of the House of Representatives.The pan-European STOXX 600 index ended down 0.1 per cent after losing as much as 1 per cent before consumer staples and other defensive stocks outbalanced struggling financial shares.Hong Kong stocks posted their biggest single-day loss in over a year on Wednesday, with sentiment hurt by a tumble in index heavyweight Tencent and simmering worries over North Korea.At close of trade, the Hang Seng index was down 618.00 points or 2.14 per cent at 28,224.80.Japan’s Nikkei share average posted its biggest fall in 8 1/2 months on Wednesday as investors rushed to lock in gains after it broke below the key technical support from its 25-day moving average. The Nikkei share average fell 2 per cent, its biggest daily fall since March 22, to a near three-week low of 22,177.04.Good morning and welcome to the Markets Live blog for Thursday. Your editor today is Sarah Turner. This blog is not intended as investment advice.Fairfax Media with wires.

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