Positive lead from US and Europe may push Asian stocks higher

<p>Asian stocks are set to open higher after positive offshore leads, both from the U.S. and Europe despite S&P’s credit watch warning yesterday. The S&P500 […]</p>

Asian stocks are set to open higher after positive offshore leads, both from the U.S. and Europe despite S&P’s credit watch warning yesterday.

The S&P500 was slightly higher at its close, up by around 0.1% but higher earlier in the session. The Dow Jones Industrial average was 0.4% higher. The Euro has managed to claw back some lost ground, last trading slightly above 1.34 against the dollar ahead of the EU summit this week.

The Japanese Yen is also clawing back some of its recent lost momentum with the USD/JPY trading at around 77.70, eyeing again the 77 level should risk appetite grow.

Metals are still volatile with copper still below US$3.60/lb. Traders will be eyeing news that iron ore heavyweight Vale has agreed to a 23% cut in pricing for October-December with Chinese customers after early declines in traded iron ore contracts. This will no doubt question the earnings profile of other regional mining stocks like BHP Billiton and Rio Tinto listed in Australia.

In economic news, Australia’s third quarter GDP is expected to print at around 0.8%, quarter on quarter, seasonally adjusted. This follows the Reserve Bank of Australia’s 25 basis point cut in official interest rates yesterday admit signs that growth is starting to moderate.

With inflation now under control, Australia is joining other Asia Pacific nations in addressing growth priorities into 2012, with China’s response still the most important for the region.

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