Australian central bank cuts interest rates
City Index June 5, 2012 5:30 PM
<p>Asian stocks might find some relief today after reasonably positive, or perhaps less negative, offshore leads. US markets didn’t exactly set the world on fire […]</p>
Asian stocks might find some relief today after reasonably positive, or perhaps less negative, offshore leads.
US markets didn’t exactly set the world on fire overnight but they did turn around from prior losses, paring back to finish the session relatively flat. The Nasdaq performed better, up around 0.5%.
Regional economic news will be focused on the Reserve Bank of Australia this morning and their call on interest rates.
Market expectations are for a cut of at least 25 basis points, some speculating a cut of as much as 50 basis points, but City Index believes a hold scenario might be more likely as the central bank waits to evaluate this month’s jobs data.
The Australian dollar firmed in early morning trade to last settle at 97.32 US cents. The Euro was trading slightly below 125 US cents at the time of writing while the dollar yen was still at elevated levels, last buying 78.35.
In regional corporate news, Etihad Airways has taken a minority 3.96% holding in Virgin Australia. Etihad – the national airline of the United Arab Emirates – confirmed the stake had been built over recent weeks.
This comes at a time where market speculation that Emirates Airlines and Qantas might be working on a tie up have seen brokers re-running their numbers.
In commodities, gold continues to consolidate its recent gains, last trading at US$1620/oz while silver is settling nicely at US$28.28/lb. Copper seems to be holding the US$3.30/lb level convincingly, despite dipping below it yesterday during the afternoon Asian trading session.
Energy prices are likely to continue drifting lower until a clearer growth picture emerges from the US economy – still the largest consumer of oil products. Brent was last trading at US$99.02 per barrel.
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