ASX 200: it’s all about Greece right now

23 June, 2015

Most major equity markets are in the black in Asia, with the notable exception of those in China that continue to face panicked selling after the retail dominated Shanghai Composite witnessed its worst week since the GFC. Most equity markets in the region have been buoyed by the notion that Greece will avoid defaulting on its debt in the near-term, with Athens conceding some ground to its creditors overnight. There’s no agreement yet, but the market is hopeful that Greece and its creditors will find common ground before Athens is due to repay €1.5 billion at the end of month. Negotiations are expected to continue throughout the week, with another summit reportedly planned for Wednesday.

The optimistic tone stemming from European has helped to push the ASX 200 around 1.3% higher at the time of writing. It’s not surprising that Australia’s major banks are leading the charge, with the sector 1.5% in the black at the time of writing. In fact, all major sectors are in positive territory as we head into the close. A softer Australian dollar is also helping to boost the equity market, although the flow-on effect is limited due to the somewhat volatile nature of the Australian dollar.

Stronger than expected Chinese manufacturing data may have similarly helped to augment sentiment. HSBC’s June flash China Manufacturing PMI jumped to 49.6 from 49.4, beating an expected increase to 49.4. However, the index remains in contraction territory for the fourth straight month, after only a brief push into expansion territory in February. This is likely why we didn’t see a massive reaction from either the ASX or the Australian dollar.

Market outlook

Buying into a hyped market is always a risky proposition, but if the euphoria continues the rally may gather speed. The risk is that Greece and its creditors fail to find more common ground this week and talks collapse, potentially resulting in the first default of a developed country. Locally, there’s not much to keep an eye on this week, and the small amount of local economic data due to be released may take a backseat to events in Europe.

From a technical perspective, the ASX 200 is nervously holding below 5,700, but it has broken out of its medium-term downward trend. The question that everyone is asking is, is the correction over? This week is very important for the ASX 200, both from a technical and fundamental perspective – we’re eyeing off a very important zone around 5,800.


Source link  
Markets turn focus towards Trump address to Congress

On the evening of Tuesday, February 28th, US President Trump is slated to give a major address to a joint session of Congress in lieu of the usual State of the Union address...

FOMC meeting minutes signal rate hike fairly soon – dollar unimpressed

The minutes from the most recent FOMC meeting three weeks ago – the first such meeting since Donald Trump’s presidential inauguration – were released on Wednesday afternoon...

Crude oil look set to resume bullish trend

Oil prices have been coiling for several weeks now with both contracts spending most of their time in a tight four dollar range...


US stocks could rise 6-7% further before potential crash

The US stock markets hit repeated new record highs last week. The positive sentiment has continued at the start of this week, with Asian and European markets drifting higher in an otherwise quiet day. US index futures point to further gains at the open later on...

Fed gives little indication of interest rate trajectory

The Federal Open Market Committee (FOMC) meeting has come and gone, and little has changed in the financial markets as a direct consequence. In unanimously deciding to keep interest rates unchanged, as widely expected...

Surging equities at risk ahead of earnings season

While earnings season has started on a very positive footing, however, banks and other financial companies were already expected to shine more than others due to rising interest rate expectations. As non-financial companies begin to report in the coming weeks...


Gold rebound heading for major resistance

For more than two weeks, the price of gold has been in a strong rebound from its late-December bottom around the $1125 level. This rebound follows a sustained drop in price that began from the July highs around $1375 and followed-through to the December lows...

Crude oil at higher plateau ahead of US inventory data

Crude oil prices have recently been lifted to year-to-date highs on a successful agreement to cut oil production and control supply among major OPEC and non-OPEC oil producers...

Gold rebounds off key level ahead of busy week

As we reported the possibility on Friday of last week, gold did indeed fall further lower this week. The rising dollar, yields and US equity prices all weighed on the appeal of the buck-denominated, noninterest-bearing and perceived safe-haven precious metal...

  


Share: