Market Morning

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As equity markets in Asia slumped on Friday the followup on the Trans-Atlantic bourses was similar, as ructions from Greece continued to spook everyone with a race back to the US Dollar. Right now, riots in Athens as the Greek Parliament tries to vote on a new austerity package will likely provide more stress for risk markets and possibly a boost to risk-off markets (i.e USD and US/German bonds) in a time reminiscent of May 2010.

Here is what happened on Friday in detail:

The UK FTSE finished down 0.7% to 5852, still well above its resistance level at 5700 points with the German DAX down more than 1.4% or 95 points to 6692 points, still on trend and eyeing off the pre-correction support level (now resistance) at 7000, but a potential retracement or correction is clearly possible.

The Euro (EUR/USD) dropped almost 1 cent against the USD, falling below 1.31 to 1.3172, but has rallied this morning, now at 1.324, as the USD Index gained strength, up 0.6 points to 79.22, playing with resistance at this level:

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The resilient AUD dropped sharply in Friday trade, looking toppy on the charts, slipping below resistance at 1.07 against the USD, but has recovered slightly in early trade this morning, at 1.071. Aussie 10 year bonds were bid up again, yields falling exactly to 4%, still below the cash rate.

US markets were slightly less bearish than their Euro counterparts, with the S&P500 Index finishing dow 9 points or 0.7% at 1342 with the narrower Dow Jones also down 0.7% at 12801 points ad the tech heavy NASDAQ Composite down 0.8% or 23 points to 2903. All US markets remain in primary uptrends.

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To commodities, WTI crude lost over 1%, finishing at $98.67USD a barrel, remaining below the “magic” $100 number. Let’s hope for US consumers that it stays that way, as Brent crude was similarly sold off, down $1.28USD a barrel to $117.31 on the 3 month futures.

Gold had another very volatile session hitting a low just above $1700 before consolidating at $1722USD an ounce, down 0.4% and continuining to reject resistance at $1750USD per ounce – this is not bullish action:


The Aussie SPI Futures are pointing to a slightly higher open for the S&P/ASX200 index, probably up 15 points around the 4262 points level on these leads, plus probably bouncing on any sign of resolution in Greece (the parliament votes as I write this)
Earnings today include retailer JB Hi-Fi (JBH) and regional bank Bendigo/Adelaide (BEN) announcing interim results so expect some movement there.

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Trading Day will cover the Asian market session and the “ASX8” stocks after the close in the afternoon.

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