Asia Market Update: Asian market relatively flat; Rio Tinto raises $2 billion in corporate bonds.

<p>Asian markets were mixed again today, disappointing when taken in the context of weekly performance. The MSCI Asia Pacific Index added 0.7% at late afternoon […]</p>

Asian markets were mixed again today, disappointing when taken in the context of weekly performance. The MSCI Asia Pacific Index added 0.7% at late afternoon Tokyo trading, after earlier gaining as much as 1.6%.

Standard & Poor’s 500 Index futures slid 0.3%, indicating the U.S. stocks gauge may halt a three-day rally. Markets are still uneasy about European developments and traders are unwilling to hold any unnecessary positions.

Australian corporate news was dominated by Myer – an iconic Australian department store operator – which exceeded market expectations but hosed down future expectations. When digging under the bonnet, sales continue to decline and earnings are largely driven by cost management – a strategy which is not sustainable over the medium-long term in retail. Comparable sales were 7.9% down in the fourth quarter, echoing similar trends among other discretionary retailers in Australia.

Despite all the market turmoil, resource giant Rio Tinto managed to raise US$2bn at very favourable rates in the corporate bond market. Rio Tinto priced 5 year notes at 2.25%, 10 year notes at 3.75% and 30 year notes at 5.20%. The margin over treasuries shows there is appetite for high quality corporate debt, a positive for other large caps looking at raising money in the same market.

All eyes are on Europe again tonight with key developments, particularly around Italian bonds, to be watched closely. A Greek default is by now priced and accepted as a near certainty.

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.