Australian Shares

By Chris Becker The fallout from Friday nights non-farm payroll print in the US continues and renewed stress about a Greek default pulled stocks down around the world as Australia had a holiday.

Stan Shamu for Chris Weston, Chief Market Strategist at IG Markets News that Greece deferred its IMF payment due this week resulted in a bund rally as the sell-off in Greek bonds resumed.

By Chris Becker By deferring this week’s IMF payment and bundling with the other neck crunchers due in June, Greece has riled risk markets overnight with stocks hit as hot money returned to bonds.

From BofAML: Hedge funds increased gross exposure to $1.9tn notional as of the beginning of Q2 2015, a 5.1% QoQ increase.  Percentage-wise, long exposure stood at 132%, slightly below the Q2 2007 reading of 133%. Short exposure was 55%, much lower than the Q2 2007 reading of 74% (Chart 3).

Chris Weston, Chief Market Strategist at IG Markets Mario Draghi basically gave fixed income traders the green light to carry on with the radical position adjustment in the German and French bond markets yesterday, with talk that traders should expect higher volatility in this asset class.

By Chris Becker A somewhat confusing picture overnight as the US Biege Book, an indicator of economic strength, showed moderate regional growth across the US after the poor first quarter, while the US services PMI expanded but not as strongly as anticipated.

Evan Lucas for Chris Weston, Chief Market Strategist at IG Markets Where is the next leg?

Stan Shamu for Chris Weston, Chief Market Strategist at IG Markets Greenback grinds higher It’s been a lacklustre day for Asian equities with even Japanese and Chinese markets taking a breather after the recent run.

By Chris Becker A solid ISM Manufacturing print gave the US Dollar and US markets a small bounce overnight, but the Greek debt situation continues to weigh in Europe, where the Troika yet again met in secret to discuss the once-sovereign state’s future as a rolling series of debt payments begins this Friday.

Chris Weston, Chief Market Strategist at IG Markets Looking around the capital markets on the first day of the new week and month, the bigger movers on the day have really been the EUR, NZD and ASX 200.

By Chris Becker On Friday, confirmation of an expected slowdown in US GDP in the first quarter was surprisingly backed by a poor Chicago PMI and lacklustre consumer confidence result that sent US shares and the dollar down.

Stan Shamu for Chris Weston, Chief Market Strategist at IG Markets Japan getting it done While attention remains pinned on China, Japan has been the quiet achiever in Asia with the Nikkei remaining at 15-year highs.

By Chris Becker The USD continued its pause overnight as the dual meme of Fed rate rises/Greek debt problems did the switcheroo with the latter dominating headlines and risk appetites as creditors announced they are no closer to a deal with the beleaguered state.

Chris Weston, Chief Market Strategist at IG Markets Asia equity markets really are beating to their own individual drum at present, with such interesting and compelling market and economic thematics unique to the geography.

By Chris Becker The USD paused its march higher overnight as possible rumors of a deal on Greek debt helped lift risk spirits across both sides of the Atlantic.

Chris Weston, Chief Market Strategist at IG Markets It looks as though the USD has found its mojo again and this once again is having clear ramifications for other asset classes.

From The Australian: Australian companies with US dollar earnings will be prime property over the next 12 to 18 months, according Shawn Hickman of Market Matters.

By Chris Becker This is what happens when you have one market taking a long weekend with US traders coming back and hitting the sell button and buying USD en masse!

Stan Shamu for Chris Weston, Chief Market Strategist at IG Markets Bid tone maintained in Asia Even with limited leads from overnight trade, Asia has managed to grind slowly higher in a fairly quiet session.

By Chris Becker A quiet start to the week with UK markets closed and the US Memorial Day long weekend.

Stan Shamu for Chris Weston, Chief Market Strategist at IG Markets Asia off to a strong start A stronger greenback has worked a treat for Asian equities and seen the region get off to a positive start to the week.

From Deutsche on the S&P500: “…our PE/VIX market emotion indicator climbed to 1.3 on S&P trailing PE of 18 and 3m avg VIX of 14.

From Credit Suisse:  In this report we note that the current forecast market wide dividend pay-out ratio is at a 21-year extreme high having trended up significantly over the past four or so years as investor demand for yield has intensified over that period (see Figure 1).