US and Europe weakness may weigh on Asian markets
City Index December 13, 2011 4:29 PM
<p>More losses are expected for Asian stocks today given weak offshore leads. We continue to watch the copper price very closely and having failed to […]</p>
More losses are expected for Asian stocks today given weak offshore leads.
We continue to watch the copper price very closely and having failed to breach above US$3.60/lb last week, the price now looks set to test US$3.30/lb. Copper is a key indicator of industrial activity, particularly in China which is a significant marginal consumer. The copper price was down another 2.1% overnight.
In equity markets, nine out of 10 industry groups on the S&P500 were down last night. The index on aggregate was 0.9% lower at the close, reversing a 1.1% gain. The market was clearly displeased by the lack of any new stimulus proposed by the US Federal Reserve as 2011 winds down.
In currencies, the Australian dollar is holding just above parity against the U.S. dollar the time of writing, but it could very well fall below throughout the Asian session.
The Japanese Yen also weakened with the USD/JPY trading just shy of 78.00. Japanese exporters will be welcoming the movements but more is needed. A Bank of Japan intervention, if well timed, might see the Yen weaken further should global risk appetite continue to contract.
The Euro also continues to extend its losses against the U.S. dollar, last trading just above 1.30 as sovereign debt issues and the risk of credit downgrades continue to weigh on sentiment.
In Australian corporate news, telco giant Telstra has announced the appointment of a new CFO to commence early next year.
In the financials space, Bank of Queensland’s 12% French shareholders are said to be shopping around to divest their holding.
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.