Asian Markets Quick Out Of The Gates To Start The Week

14.54 AEST, Monday 16 July 2012

Asian Markets Quick Out Of The Gates To Start The Week
By Tim Waterer (Senior Trader, CMC Markets)

The size of the rally in US markets on Friday was a little difficult to fathom, with perhaps the best explanation being that traders grew tired of hitting the ‘sell’ button. No particular data release on offer could justify the 200 point jump in the Dow which speaks to how fickle financial markets remain. It is not like the Chinese GDP figure served as a glowing report card for the world’s second largest economy.

Nonetheless, shares across Asia today ‘took the ball and ran with it’ following the Wall Street rally on Friday. While the Chinese GDP was nothing to write home about it does seem to have provided the market with a moment of contentedness, and given the slim pickings on offer regarding positivity around the globe traders were happy to use this as a reason to go bargain hunting on equity markets.

Given the combination of higher equities and higher commodities, the AUD has found its way back above 1.02 against the US Dollar. Today we have seen the currency trade mainly in the 1.0220-1.0240 range. The currency was around 1.0250 to start the day however with the ASX200 coming down from its earlier peak the AUDUSD rate did likewise. Overall, the AUD managed to navigate through the raft of Chinese data last week quite well, however if the currency is to make a genuine run towards and then through 1.03 we will need to see global equity markets have quite a good showing this week, as this will minimise the safe-haven buying need for US Dollars.

The ASX200 was quick out of the gates today, and not surprisingly it was the mining stocks which saw plenty of interest following a push higher in commodity prices. However, early market momentum proved difficult to maintain in the absence of any new sentiment drivers during our session, which saw our market ease back from the earlier highs. Although after the run of outs last week up until Friday, any up-days on the index are gladly welcomed with open arms.

ENDS

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