ASX at the close

Stan Shamu for Chris Weston, Chief Market Strategist at IG Markets

Calm restored in Asia

Sentiment is somewhat improved in Asian trade in the absence of fresh developments from the Yemen conflict. Currency moves remain key at the moment and there are signs the greenback might be looking to start gaining momentum yet again. The greenback has been a sleeping giant since the FOMC meeting and this has allowed some of the risk currencies to get back in the game against it. EUR/USD for example managed to find a bottom a couple of weeks ago and this took the pair back to around the 1.1000 mark. The pair had been holding at around that level for a period but it just seems to be starting to subside now. It seems the medium term trajectory for the greenback remains upward and the more positive data we receive, the more conviction bulls will have around this trade.

There has been plenty of Fed commentary this week and while different members have varying opinions on when to expect lift-off; the data will clearly do the talking. All eyes will be on Fed Chair Janet Yellen today as she speaks on ‘The New Normal for Monetary Policy’. Fed Vice Chair Stanley Fischer also speaks separately in Frankfurt, but I doubt this speech will offer much more than his comments earlier in the week. Janet Yellen has been very balanced and controlled in her language recently and it’ll be interesting to see how market interprets her comments this time. We also receive revised Q4 GDP out of the US.

Mixed data from Japan

USD/JPY has also been interesting to watch, particularly on a day when we’ve had a raft of economic releases out of Japan. While the CPI reading was relatively in-line with expectations (remaining at zero after stripping out impact of sales tax hike), household spending and retail sales remain negative. The data wasn’t enough to cause any volatility for the yen and traders continued to focus on the yen weakening due to reduced safe haven demand. This allowed the Nikkei to rally on a day where several companies are trading ex-div. Around 120 points worth of dividends came out of the Nikkei today, but given how strong the performance in equities has been, I think most of that would have gone straight back into the market. As a result, buying dips in the Nikkei remains a compelling strategy.

ASX 200 bounces back

Apart from the greenback attempting to liven up again, the other key theme at the moment is watching the developments in Yemen and trying to position for the assets that are likely to move the most as a result of it. While oil rallied in Asia yesterday, it has been somewhat calm today and this has seen energy names give up some of their early gains.

The ASX 200 has been among the leaders around the region today as we recover some of the sharp drop experienced towards the close of Thursday’s trade. Needless to say the move was an equity options expiry related exaggeration. It’s almost as if normal service has resumed for the local market with good demand for the yield plays. Some of the healthcare names are also coming back to life and I feel this is in anticipation of renewed USD strength.

Firmer open for Europe

Ahead of the European open, we are calling the major bourses firmer. There isn’t much on the European calendar today but there has been talk Greece will be releasing some reform measures by Monday. Should we see EUR/USD resume its downtrend then I feel equities will respond positively to this. The DAX in particular has had a strong correlation to the currency lately and would be the biggest beneficiary of renewed euro weakness.


  1. Day four in the @UptownFunk = Bull v @Stomper = Bear challenge and starting to feel a bit sorry for FunkyBoy….

    FMG (aka CartelCo) got smashed at the close finishing down 5.66% for the day.

    RIO and BHP danced around the edges closing up 0.09% and down 0.10% respectively, which widens the spread in favour of The Bear.

    Progress score at the close…

    23/03/2015 27/03/2015 Mvt %
    BHP $31.00 $30.75 -$0.25 -0.81%
    RIO $58.21 $56.550 -$1.66 -2.85%
    FMG $1.98 $2.000 $0.02 1.01%
    Average $30.40 $29.77 -$0.63 -2.07%

    (On a proportional basis the Bear now pulls ahead by 0.88%)

    • Stomper

      UptownFunk has asked me to advise that he has been kicked off the site. His account has been moved to spam by macrobusiness.

      So, he cannot post on the site anylonger.

      Check WW post to Jonny G Banger earlier this week, re ‘add to spam filter’ post

    • Stomper … sorry it’s ‘flyingfox’ , not WW, as I previously advised.

      Here’s the posts :
      UptownFunk March 23, 2015 at 11:43 am

      Economy been around bottom area for too long now … expecting a turnaround / rebound from here is rational. Contrary indications are not.

      This will assist business confidence, investment and consumer spending.

      Interest rates have much further to fall, and will.

      Balance sheets in companies will improve. Further loan losses not seen at all. We are at the bottom of the economic cycle, medium term.

      Buy those banks !!!!

      flyingfox March 23, 2015 at 5:28 pm

  2. We are on board by default (& in the absence of anything else) with Rio and BHP still notionally Australian and a mining/resource/energy industry and assoc service industries geared up for resource exploitation.

    But your comment goes to the question of at what part of the commodity cycle do you reasonably commence investment in?

    • When the Frag stops flying & the dust settles. I’ve read somewhere the chocolate wheel stopped on “expected to be a couple of years away”…………… But there’s a conga line of spinners waiting for their turn.


    “Australia’s federal politicians have been outed as the country’s most eager property investors, casting doubt on their willingness to rein in negative gearing.

    The controversial practice allows taxpayers to use tax losses from rental properties to cut their taxable income. Critics argue it contributes to Australia’s house affordability crisis.

    Around one in seven Australian taxpayers own rental properties, but among federal politicians it is at least one in three.

    Figures compiled by property authors Lindsay David, Paul Egan and Philip Soos show federal politicians own an average 2.4 properties each, including their family homes.

    Collectively they own a portfolio of 541 properties, conservatively estimated to be worth $350 million.”

  4. Your new site layout looks pretty good on the desktop but needs a check on mobile safari, big white and red bars at the top don’t always hide and scrolling is not smooth. Hope this helps, keep up the good work.

  5. BRILLIANT !!!
    “French television station Canal+ recently sat down with Dr. Patrick Moore for an upcoming documentary. Dr. Moore, who claims to be an ecological expert and is currently the frontman for Ecosense Environmental, stated to the interviewer that Monsanto’s weed killer Roundup was not responsible for skyrocketing cancer rates in Argentina.

    This claim comes on the heels of last week’s World Health Organization report citing the weed killer as a probable cause of cancer.

    Soon after the interview began, it took a turn for the surreal.

    Dr. Moore insisted that Roundup is safe to drink, at which point the interviewer did the only logical thing one could do in that situation. He offered the doctor a glass of the weed killer to allow him an opportunity to back up his statement. The following is the text from that exchange.

    Dr. Patrick Moore: “You can drink a whole quart of (Roundup) and it won’t hurt you.”

    Canal+: “You want to drink some? We have some here.”

    Moore: “I’d be happy to, actually…. Uhh…Not.. Not really. But I know it wouldn’t hurt me.”

    Canal+: “If you say so, I have some glyphosate, have some.”

    Moore: “No. I’m not stupid.”

    Canal+: “So, it’s dangerous, right?

    Moore: “No, People try to commit suicide with it and fail; fail regularly.”

    Canal+: “Tell the truth, it’s dangerous.”

    Moore: “It’s not dangerous to humans.”

    Canal+: “So, are you ready to drink one glass?”

    Moore: “No, I’m not an idiot. Interview me about golden rice, that’s what I’m talking about.”

    • Simplicity here , posting as jack ellen#%#….

      Wont say his whole name, no idea why I’m on his account? Anyway in reply to round up being poisonous or carcinogenic.

      I’m a farmer, I’ve used roundup for many many years. The product is extremely safe the most dangerous thing about this product is the soap they add to the product to help absorption / spread.

      I have read countless studies it is extremely safe considering it is nothing more than a salt.

      It does not end up in the food chain. No farmer sprays good with round up. Except round up ready crops. Even so its chemical structure turns into completely harmless bi product very quickly.

      Anyone who believes it is carcinogenic neglects to see the overwhelming evidence that it is not. Tried and tested.

      • Further more the study showed that farmers who used round up had higher rates of cancer… Farmers in general have higher rates of cancer of course but thats caused by other carcinogenic chemicals that are used on farms.

  6. As for the Yemen situation; Iran is the elephant in the room.If they react excessively, things could get ugly quickly but they are not stupid to go into all out war. They will limit things to protests etc.

    It is likely to a fairly easy invasion by the Saudis taking the major cities but struggling to hold the hilly country side if the Hothi fight a guerrilla war (not really an if….), probably with help from Iran. Plus the Al Queda element is hardly going to be welcoming the Saudi with open arms. So it is not going to go away quickly.

  7. (China) Banks Slash Dividends as Loans Sour From Beijing To Pearl River – Bloomberg Business

    (Bloomberg) — China’s biggest banks are accelerating cuts to their dividend payouts as bad debts pile up from struggling exporters in the Pearl River Delta, coal companies in the nation’s west and manufacturers in the Bohai Rim near Beijing. … read more via hyperlink above …