Apple shares climb above US$500; Asian stocks set for modest gains

<p>Asian stocks are set for modest gains when trading resumes today. Overnight, the Dow Jones Industrial average was 0.6% higher while the S&P500 added 0.7%. […]</p>

Asian stocks are set for modest gains when trading resumes today. Overnight, the Dow Jones Industrial average was 0.6% higher while the S&P500 added 0.7%.

Shares in Apple climbed above US$500 for the first time, a sign that the market is starting to price in the full extent of last quarter’s earnings release which blew market expectations away.

Risk assets were mostly higher with the exception of copper and gold which were mostly flat. Copper was last at US$3.84/lb while gold settled slightly above US$1721.

The Australian dollar is now back above 1.07 comfortably against the US dollar, last trading at 1.0728.

The Reserve Bank of Australia’s Assistant Governor Guy Debelle came out this morning Asian time to discuss funding pressures facing the Australian banks. He notes a rise in margins over benchmark rates in recent months but there has been a narrowing in recent days which should please investor nerves.

Australian banks sold around A$17 billion in covered bonds so far this year at spreads of between 170 and 210 basis points ts over benchmark, compared to spreads of just 127 basis points for senior unsecured debt in mid-2011. Spreads have recently fallen back to around 140 basis points.

In other currencies, the Euro gave away some of yesterday’s gains to last trade at 1.3188. The Bank of Japan is stuck between a rock and a hard place, with yesterday’s economic growth numbers showing the full extent the high currency is having on exports, particularly as European weakens.

The US dollar was last buying 77.59 against the yen, higher than the rate experienced over the past few weeks but still not high enough for Japanese multinationals.

Build your confidence risk free
Join our live webinars for the latest analysis and trading ideas. Register now

StoneX Financial Ltd (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.

For further details see our full non-independent research disclaimer and quarterly summary.