Another lacklustre week for Asian markets as European woes linger
City Index July 28, 2012 5:16 PM
<p>It’s unlikely to be an exciting week ahead in Asian markets – much of the European debt story is still unresolved and talks around growth […]</p>
It’s unlikely to be an exciting week ahead in Asian markets – much of the European debt story is still unresolved and talks around growth plans are unlikely to solidify until mid next month, when the Greek election is expected.
When newspaper headlines start to stress the disastrous state of markets, it’s usually a sign that things may have bottomed. It’s unclear if we are at the bottom yet but index futures are pointing to some relief, contrary to expectations, this morning.
The Australian dollar was last trading back above 98 US cents at 98.29. The Euro was also up and off its lows, but less of a rally, last at 125.75 US cents. The dollar yen remains sub 80 at 79.56.
Copper seems to be holding above US$3.40/lb for the time being, last indicating US$3.46/lb. It remains a key indicator for industrial strength particularly out of China and contrary to all the gloom, the copper price hasn’t exactly collapsed.
Friday’s official PMI data from China might surprise on the upside and copper will be a good lead indicator in the days ahead to what the market is really expecting.
The Australian dollar will also follow the trend.
Gold remains sub US$1600/oz and for the time being it doesn’t seem to be showing any compelling reason to break above US$1600/oz.
Australian corporate news will focus on the collapse of industrial services group Hastie today, not necessarily because of its significance to the ASX200 index but more so the exposure of local banks to the $500m of debt the group owns to various parties.
Chinese industrial earnings decline 2.2% in April compared to the same period last year according to the National Bureau of Statistics. That compared with a 4.5% gain in March so the moderation is coming off a solid base.
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