Summary of 25th Jan opening in AUZ

Info from Compass Global Markets in Auz !!

 

"Investor optimism was dented overnight after European finance ministers failed to agree on the Greek debt swap deal and called for a greater contribution from debt holders. Finance ministers are pushing bondholders for greater debt relief by asking them to accept lower interest returns in the proposed debt swap deal. The stalling of negotiation has fuelled concerns that Greece will fail to make a bond payment due in late March. The EUR fell from a high of 1.3065 during the Asian session yesterday to as low as 1.2954 overnight.

 

In more sobering news, the IMF has cut global growth forecasts and warned that the “epicentre of the danger is Europe but the rest of the word is increasingly affected.” It cut global growth for 2012 from a September forecast of 4% to 3.3% and predicted a recession in Europe. The IMF called for an increase in the size of Europe's rescue fund and a more active role from the ECB to address the crisis. In a dire warning, the IMF warned of a 1930's style worldwide depression unless more countries play their part and identified a possible global financing need of over $1 trillion in the next few years. The broadly negative market sentiment has seen the Australian dollar fall to as low as 1.0428.

 

Update from Compass Global Markets

 

US equities fell after advancing for five consecutive sessions as negotiations stalled over differences of opinion between European finance ministers and Greek bondholders on the proposed debt swap deal. Furthermore, the IMF warned that there was potential for “political paralysis” in the United States that could lead to an unwinding of stimulus spending. The S&P 500 closed 0.1% lower at 1,314. Earlier in Europe, the bourses eased with the DAX down 0.27% to 6,419 while the FTSE lost 0.53% to 5,752.

 

Commodity prices managed modest rises despite growing global growth concerns with the CRB index closing 1.11 points higher at 314.69. WTI crude fell 0.5% to $99.10 on the Greek debt concerns. Precious metals have also eased slightly with gold lower by 0.77% to $1,665 while silver has lost 0.84% to $32.00. Soft commodities were mixed with cocoa rising almost 7% while copper has gained 0.33%. Domestically, we have the release of Australian CPI data while overseas there is a plethora of high impact data releases and statements from both the UK MPC and the FOMC. "

 

Kind Regards

Steven 
Steven Morris Chartered Accountant (SA)
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