Market Morning

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Santa dropped some coal into European stockings last night, as the ECB “backdoor QE” appeared to be a fizzer. Sovereign downgrades (Hungary to junk), bad GDP reports (Italy to go into recession alongside Spain) and slow growth forecasts (UK particularly) jumbled the “everything is now fine” meme alongside the US Congress’ delay in funding payroll tax cuts.

In Europe, the UK FTSE finished down 0.5% to 5389 points, whilst the German DAX dropped almost 1% to 5791 points. In the after hours futures markets, both markets are up slightly following the US closes. Note that all the European bourses are well under their long term moving average, implying continued bear market conditions, although higher lows give some credence to a short term bullish view:


The Euro (EUR/USD) slipped against the USD and is currently trading at 1.3045, as the USD Index stabilised at 80 points, its recent price movements pointing to a strong uptrend channel on the weekly chart:

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After falling during the day, the US equity markets rallied somewhat in the afternoon session, finishing flat or slightly up. The S&P500 closed up just 2 points to 2143 points, the tech heavy NASDAQ dropped almost 1% on the back of a bad results from Oracle (which fell 12%), down to 2577 and the Dow Jones up just 4 points to 12107 on light volume.

The AUD maintained above parity against the USD, and got a small kick up from Moody’s reaffirming Australia’s AAA rating this morning, and is currently trading at 1.0101, whilst WTI crude climbed again, rising $1.72 to $98.97 USD a barrel. Brent crude rose similarly, now at $107.96 a barrel.

Most commodities were lightly bid up, with the CRB Index up 0.74% but still in a dominant downtrend, with gold essentially unchanged overnight after surging above $1640USD an ounce briefly it has now retreated to be at $1615 on the spot market before the opening of the Asian session, still under its long term trendline.

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The SPI Futures point to falls on the open for the S&P/ASX200 index, currently down 23 points or 0.5% , as the market looks towards the Christmas break with relief.

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