Prospects of Greece opting out of the Euro zone still worrying markets
City Index May 15, 2012 5:27 PM
<p> Asian stocks will no doubt be under more pressure today with fresh negative offshore leads. It seems as though there is a renewed effort […]</p>
Asian stocks will no doubt be under more pressure today with fresh negative offshore leads. It seems as though there is a renewed effort among European leaders, who appreciate the political challenges Greece faces, to grant it some extra time to meet budget cutting targets.
Whether or not this (effort) is enough is too early to determine. Luxembourg Prime Minister Jean-Claude Juncker overnight said a fully functioning Greek government would be entitled to “tinker” with conditions attached to the 240 billion euro deal struck earlier this year.
The Euro continues to decline, despite the reassurances, last trading at 128.30 US cents after bouncing off the session lows of 128.16.
The Australian also continues to struggle, remaining below parity, last buying 99.65 US cents. The dollar yen remains below 80 and the bank of Japan will have to again contemplate an aggressive intervention stance.
Panasonic and Sony’s profit woes, among other key exporters, will no doubt be fresh in their mind.
In commodities, copper has slipped well below the SU$3.60-65/lb support range we note daily, last trading at US$3.52/lb. The breach suggests a test of US$3.30/lb – where it has solid support – is possible in the coming days.
Copper will likely drag other metals with it, and diversified miners as well. Copper’s quick decline, after showing resilience last week, will probably flow through to energy markets which similarly look resilient.
Brent, while having fallen, perhaps has a little more to go if copper does test that US$3.30/lb range. Gold meanwhile remains very sluggish with bearish sentiment near historic highs. It last settled at around US$1558/oz. Silver looks resilient at US$28.22/oz.
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