The dealmakers and can kickers failed to ignite equity markets overnight, but they sure put a kick up the commodity complex, particularly gold and oil which raced ahead of the Greek “success”. Let’s have a closer look at what happened last night in detail:
The UK FTSE finished down 17 points or 0.3% to 5928, almost at the psychologically powerful 6000 point level, and well above its resistance level at 5700 points but stable for now. The German DAX was off over half a percent to 6908, wanting to extend its extreme gains and get past 7000 points, the support level before the correction in August 2011.
The Euro (EUR/USD) went as high as 1.323 after the deal, then came back slightly, and is currently trading there this morning as the USD Index slipped, staying just above 79 points, not adding weight to a risk-off correction, but still confirming a continuation of USD weakness:
The resilient AUD slipped below 1.07 where it remains in early trade this morning at 1.065 against the USD, with Aussie 10 year bonds coming back only slightly, yield slipping to be at 4.1% and remaining below the cash rate.
On the other side of the Atlantic, US equity markets were flat, with the S&P500 barely up 1 point to remain at 1362, the narrower Dow Jones Industrial Average up 16 points or just over 0.1% – pancake flat, whilst the tech-heavy NASDAQ Composite was down 3 points, or 0.1%, again flat. This is unusual given the hoopla around the Greek deal and that US corporate earnings – unlike domestic – have been quite positive and even surprising in their rigour.
To commodities, WTI crude – the light sweet oil is now above $105USD a barrel on spot prices, getting over $106USD at one point. This is continued bad news for US consumers with Brent crude rising even faster and to be above $121 on the 3 month futures.
Commodity action extended to the shiny metal, with gold soaring above its resistance at $1750USD an ounce, rising almost $30 or 1.5% overnight, finishing at $1761USD an ounce, where it remains on the open of the Hong Kong session.
Looks like gold has broken out of its bullish flag pattern with a target of $1850 to $1900 an ounce:
The S&P/ASX200 index has opened down 7 points on these flat mixed leads to the 4280 points level, with more earnings reports on the way.
Trading Day will cover the Asian market session and the “ASX8” stocks after the close in the afternoon. Apologies for lack of post yesterday, I was hit by a series of big thunderstorms and lost power (and hence internet) for most of the afternoon and evening. Let’s hope the storms stay away today, and on the markets to boot…