By Chris Becker
Remember to read “Trading Week“, published Saturday morning, to put these events and ideas in context.
Did we see the start of a recovery today, as the local stock market and the AUD (and every economist in the country) reacted positively to the GDP print (from 2 months ago)? My contrarian antennae are going nuts at the moment, as this may represent an excellent time to add to shorts on the Aussie, and possibly the ASX200 (the latter I’d wait for a catalyst).
As it was the ASX200 was not the best performer today in Asia, only climbing 0.3% or 11 points to 4055 points:
As my favourite song goes, no reason to get excited. I still contend that the technical picture remains on a knife edge, and the market still requires a catalyst – probably around June 17-20 (Greek elections and the FOMC meeting) . I still expect volatility between 4000 and 4120 points, with any hint or sniff of Chinese stimulus/easing/something setting off the oversold resources stocks
In other Asian markets, the Nikkei 225 gained 1.8% whilst the Hang Seng put on 1%, the Shanghai Comp is currently down a quarter of a percent.
On to the currency markets, the big mover was the Aussie – gaining nearly 1 cnt to 98.28 against the USD. Time to get on eBay again and up to parity? Notice on the chart below I thought we were seeing a deceleration and speaking with Deus Forex Machina this afternoon, this was not unexpected, although the GDP print was:
The Euro is up 0.3% against the USD as well, as the G-7 finance ministers decide to “act” or something or other about Europe. A long bow, but that’s what the newswires are saying is behind the uptick…
Gold again looked like it was going to take part in the small bounce and rose up to $1626USD an ounce, but has come back moving into the London trade, currently at $1623USD per ounce, whilst in AUD terms the shiny “currency” has fallen sharply, down almost $11 as the AUD rises, to $1651AUD per ounce.
Tonight
The data flow tonight picks up again, with EMU preliminary Q4 GDP, expected to be flat again, with German industrial production the other major release, expected to contract and be flat over the year. Meanwhile, the ECB meets, likely to hold rates at 1%, before we see US productivity numbers and the Biege Book. Check out our Economic Calendar here for the rest of this week’s data prints.
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