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.
GAIN Capital UK Limited (trading as “City Index”) is an execution-only service provider. This material, whether or not it states any opinions, is for general information purposes only and it does not take into account your personal circumstances or objectives. This material has been prepared using the thoughts and opinions of the author and these may change. However, City Index does not plan to provide further updates to any material once published and it is not under any obligation to keep this material up to date. This material is short term in nature and may only relate to facts and circumstances existing at a specific time or day. Nothing in this material is (or should be considered to be) financial, investment, legal, tax or other advice and no reliance should be placed on it.
No opinion given in this material constitutes a recommendation by City Index or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person. The material has not been prepared in accordance with legal requirements designed to promote the independence of investment research. Although City Index is not specifically prevented from dealing before providing this material, City Index does not seek to take advantage of the material prior to its dissemination. This material is not intended for distribution to, or use by, any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation.