Wednesday 9th May - Will the Carnage carry on !!

REF : Compass Global Markets

"Markets have reeled as concerns escalate that a change in the political landscape in Greece could derail the bailout agreements as parties that have promised to cancel bailout accords have the opportunity to form a new government. Speculation is mounting that such a move would inevitably lead to the exit of Greece from the eurozone and result in further complications for a Europe that is still on the brink of financial disaster. The failure of eurozone policymakers to keep Greece in the fold could precipitate a contagion that could sabotage the global economy. The EUR continues to slide and is trading around the psychological 1.3000 level.


Australian treasurer Wayne Swan has delivered a budget designed to spread the benefits of the nation's mining boom to the so called 'battler' in an attempt to claw back support in opinion polls for his beleaguered government under the failing leadership of Prime Minister Julia Gillard. Whilst outlining spending cuts of over $33 billion over five years to bring it back to surplus, the budget allowed for cash payments to parents, higher funding for dental care, and support for the elderly and disabled. As usual, the Australian dollar barely moved as the budget was announced but is trading lower at 1.0100 as markets fall on increasing jitters surrounding Greece.


Equity markets have reacted poorly to the political turmoil in Europe. 8 out of the 10 industry groups on the S&P 500 have lost ground, led by falls in financial and commodity stocks, as the index closed down for the fourth session in five, losing 0.43% to 1,364. McDonald's lost more than 2% as global sales forecasts missed estimates while Fossil plunged 35%. Earlier in Europe, bourses closed significantly lower with France's CAC plunging almost 3% while the DAX lost 1.9%. The Greek equity index has slumped to a 20 year low after losing 3.6%. Asian stocks had earlier made modest gains but look set for significant falls in trade today as they take the lead from overnight trade.

Commodity prices continue to fall seeing most of the gains on the S&P GSCI for 2012 evaporate and the CRB losing 2.33 points to 296.34. WTI crude slumped further on official Saudi comments that prices are “still a little high.” WTI is settling at 97.40 after losing 0.6%. Precious metals have plummeted outside of recent ranges with gold losing 2% to $1,607 while silver is also down 2% to $29.50. Soft commodities are mixed with sugar and soybean futures down the most while copper has lost 2.2%."