Equity markets in Europe and USA rallied on the news the Greek Parliament voted for a new austerity package, with risk appetite extending to commodities, particularly crude – perhaps on rising Iranian tensions – except gold, which continues to underperform.
Here is what happened last night in detail:
The UK FTSE finished up nearly 1% to 5905, still well above its resistance level at 5700 points with the German DAX up slightly less by 45 points or 0.7% to 6738 points, still on trend and eyeing off the pre-correction support level (now resistance) at 7000, but a potential retracement or correction is still possible.
The Euro (EUR/USD) rallied against the USD, climbing above 1.32 to 1.3205, but has slipped this morning, now at 1.318, as the USD Index only gave up small ground, down only 0.1 points to 79.04, still looking fairly strong.
The resilient AUD slipped below 1.07 against the USD but only temporarily and has recovered in early trade this morning, at 1.0725 with Aussie 10 year bonds sold off only slightly, yields rising to be just above 4% and still below the cash rate.
US markets had a steady session, with the S&P500 Index finishing up 9 points or 0.7% at 1351 with the narrower Dow Jones up 0.5% at 12874 points and the tech heavy NASDAQ Composite the strongest, up nearly 1% or 27 points to 2931.
Colin Twiggs has some good analysis of the US markets at his Trading Diary blog, with the Dow and S&P hitting resistance, but NASDAQ 100 (not the composite) soaring away, mainly because of Apple (which hit $US500 overnight):
Colin Twiggs chart of NASDAQ 100
To commodities, and the big mover was WTI crude gaining over 2%, finishing at $100.91USD a barrel on spot, and over $101 on 3 month futures, above the “magic” $100 number. This is not good news for US consumers although Brent crude was not as ebullient, only up 33 cents a barrel to $117.64 on the 3 month futures – something to watch closely.
Gold had another volatile session hitting a low of $1714 before consolidating at $1722USD an ounce again, not moving and continuining to reject resistance at $1750USD per ounce – this is not bullish action.
The Aussie SPI Futures are pointing to a lower open for the S&P/ASX200 index, probably down 15 points around the 4265 points level, on what should be strong leads, but as I publish this, Moody’s has announced a downgrade of Italy and Portugal credit rating with UK placed on negative outlook.
But I thought Europe was fine?
Earnings reports are light on today (the avalanche is Wednesday and Thursday) and include GWA and uranium miner Paladin (PDN) announcing interim results.
Trading Day will cover the Asian market session and the “ASX8” stocks after the close in the afternoon.