Optimism on Greek bailout could push Asian markets higher

<p>Asian stocks are set to open flat today, perhaps slightly higher if the news out of European remains one of optimisms around Greece getting its […]</p>

Asian stocks are set to open flat today, perhaps slightly higher if the news out of European remains one of optimisms around Greece getting its second bailout package. If the opposite, markets could give back some of yesterday’s gains.

US markets were closed for a public holiday. The Euro Stoxx 50 index was up around 1.2% on the Greece news and China’s moves yesterday to reduce reserve requirements for banks.

In commodities, gold was mostly flat at US$1734/oz. Copper was also mostly unchanged, last at US$3.75/lb, off its highs above US$3.90/lb booked earlier this month but with support around the US$3.60-3.65/lb level should traders sell the fact that China has moved.

In currencies, the Euro was pointing to optimism around debt negotiations, rising back above 1.32 against the US dollar to last settle at 1.3242. The Australian dollar gave back some of yesterday’s gains but remains just shy of 1.08 against the US dollar. The Japanese Yen continues to weaken but the US dollar can’t manage to crack the 80 level for the time being.

Regional traders will be closely eyeing mining companies, which have a high correlation to the level of economic growth, particularly those with exposure to the Chinese economy where expectations are now that the government will start to slowly and patiently support higher growth.

BHP, Rio Tinto and Fortescue Metals are the key names to watch in Australian trading. Japanese and South Korean exporters will be in focus as their prospects into China improve, so too will be luxury brand names and financial institutions listed in Hong Kong, like China Life for example.

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.