Get 40% Off
🤯 This Tech Portfolio is up 29% YTD! Join Now to Get April’s Top PicksGet The Picks – Just 99 USD

Markets Largely Risk-On‏

Published 11/20/2012, 03:58 AM
Updated 01/01/2017, 02:20 AM
Markets were largely risk-on throughout European and US trade as optimism that US politicians would find middle ground on the fiscal cliff helped spur a rally. Confidence is growing that a deal can be reached, as politicians from both parties continue to make some positive comments on working together to come up with a solution.

Better-than-expected existing home sales data also helped to lift sentiment along with optimism that Greece will receive the next tranche of aid. As a result we saw gains of around 2% and above in US and European equities. Risk currencies also echoed big moves with AUD/USD surging to a high of 1.0418 and remaining steady above 1.04. EUR/USD spiked to a high of 1.282 after having languished below 1.28 for a while.

Ahead of the open, we are calling the aussie market up 0.6% at 4389. It is likely to be a typical risk-on day with cyclical names leading the charge higher. Recently beaten down names in the industrials, materials and consumer space are likely to experience the biggest gains, while defensive names underperform. On the economic calendar, we have the RBA’s monetary policy meeting minutes due out at 11.30am.

After the RBA decided to keep rates on hold this month, the minutes will be highly sort after as investors search for clues on whether we will finish off the year with another rate cut. Following the RBA’s statement, which accompanied the last rate decision, it certainly seems like it is happy with the current rate setting going into next year. The commentary will put the Aussie dollar firmly in focus, with AUD/USD eyeing the 1.044 level. Elsewhere in the region, Japan will be closely watched with the BoJ’s monetary policy statement and press conference set to hit the wires.

On a stock level, we expect to see a firmer start for BHP Billiton, with its ADR pointing to a 1.6% rise to $33.76. After a strong session for commodities, we are bound to see gains across the board in the resource space. Arrium will be in focus after yesterday’s trading update. The stock has been upgraded by Deutsche Bank to Hold (from Sell) and we are likely to see other brokers react to the trading update.

Qantas will also remain in focus with the AFR reporting that the Emirates tie-up could be in doubt if an alternative proposal emerges. The airline has been subject to several headlines recently and this might continue to keep some investors at bay. Boart Longyear has been downgraded to Underperform (from Neutral) following yesterday’s earnings downgrade.
Market

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.