Traders wait and see ahead of EU summit

09.45 AEST, Thursday 28 June 2012

Traders wait and see ahead of EU summit

By Miguel Audencial (Sales Trader, CMC Markets)

Encouraging US economic data will give the Australian equities market a boost in today’s open. A lower than average volume will be present in today’s session as traders will have a wait and see approach ahead of the EU summit. Investors will also focus on tidying up their books with only a couple days left in the financial year.

The energy sector is likely to outperform the market today with crude oil posting notable gains overnight.

The US equities market finished higher as Durable Goods orders surpassed expectations. Pending Home Sales also beat forecasts providing further evidence that the US housing market is on the right track towards full recovery. New home sales figures released just a couple of days ago, also provided an encouraging result.

Commodities were stronger across the majority of asset classes last night. Crude oil had a notable rise despite inventories declining less than anticipated. This is in part due to the higher than anticipated durable goods and pending home sales data. Another reason for the rise is caused by the worker’s strike in Norway. With inventories still at high levels and strikes temporary, I expect this rally to be short lived.

Australian New home sales data is due later today and US unemployment claims will be released tonight. Although the two figures are important economic indicators, traders will give more focus on the developments on the EU summit starting tonight. Hopefully a positive result from the summit will ignite a rally in the third quarter.
ends

© Scoop Media