Market Morning

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Equity markets in Europe and USA did not respond in kind to the Asian rally yesterday, with very mixed data flow. Recessions in Italy, whilst Germany slipped and France gained, Greece continued to commit suicide, and US data and Fed talk spooked.

Here is what happened last night in detail:

The UK FTSE finished down slightly at 5892, still above its resistance level at 5700 points with the German DAX gaining 30 points or 0.4% to 6757 points, moving sideways yet eyeing off the pre-correction support level (now resistance) at 7000.

The Euro (EUR/USD) slipped again, falling below 1.31 to 1.305 against the USD, where it remains this morning, as the USD Index showed continued strength up around 0.2 points in the last 24 hours to 79.79, possibly building on a breakout and adding weight to a maturing risk-on rally (USD is still the safe haven when the risk taps are turned off)

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The resilient AUD slipped below 1.07 where it remains in early trade this morning, at 1.069 with Aussie 10 year bonds bid up, yields slipping once more to be at 3.98% and still below the cash rate.

US markets were in negative territory for most of the session, as Apple (and hence the NASDAQ) lost over 2%. The S&P500 Index losing 0.5% to 1343 points, the narrower Dow Jones falling almost 100 points or 0.7% to 12781 points and the tech heavy NASDAQ Composite down 0.5% to 2915.

To commodities, and as I said previously – watch WTI crude – the light sweet oil has gained another $1USD per barrel, almost at $102USD a barrel on spot prices, not good news for US consumers with Brent crude only putting on some minor gains, only up 23 cents a barrel to be above $118 on the 3 month futures.

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Gold had another volatile session with more than a $20 range, hitting a high of $1738 before consolidating at $1729USD an ounce, officially up $7 for the night, and where it remains on the open of the Asian session.

The Aussie SPI Futures are pointing to a muc lower open for the S&P/ASX200 index, probably down 33 points around the 4215 points level on these weak leads.

Earnings reports are avalanching today – a dozen ASX200 companies announcing interim results, the most important to watch is Wesfarmers (WES), which I’ll cover in full later today and Westpac (WBC) provides a quarterly result.

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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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