Fragile market sentiment may dampen Asian share trading
City Index October 18, 2011 9:05 PM
<p>Asian stocks are expected to open lower today after U.S. markets pared some of their recent gains. Shares were lower after a representative for German […]</p>
Asian stocks are expected to open lower today after U.S. markets pared some of their recent gains. Shares were lower after a representative for German Chancellor Angela Merkel said European leaders might be unable to completely address every sovereign debt issue at a Eurozone summit on October 23.
While this seems like a reasonable assertion, it shows just how fragile market sentiment is at the moment. The EUR/USD is still strong above the 1.37 level, though other risk currencies like the AUD/USD for example pulled back more on the news. The risk on, risk off trade, continues to come and go on a daily basis.
In Australia, minutes of the meeting from the Reserve Bank of Australia (RBA) will be closely watched today with the likelihood of a November rate cut to be expressed in more detail through the minutes.
The Aussie dollar is currently trading near its 50 day moving average of 1.0165 at time of writing. In corporate news, telco giant Telstra will put an $11bn deal with the government owned NBN Co. to its shareholders today. The outcome is crucial not only for Telstra’s own capital management but the way in which Australia’s broadband industry shapes up.
In other regional news, Thailand’s central bank is expected to leave rates on hold when it meets tomorrow after seven consecutive interest rate increases. Growth in the country has been disrupted by some of the worst floods in five decades and weaker global growth spilling over into the economy. The Bank of Thailand is expected to maintain its benchmark daily bon repurchase rate at 3.5%.
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.