Morning all
Thanks AM crew
The ASX is set to open firmer this morning after European markets continued their positive run and China's Central Bank fixed the Yuan at a stronger rate and oil prices stabilised their recent surge easing global deflation fears. US markets were closed.
SPI futures are 27 points higher at 4812
The rally in Europe cast aside poor economic data from Beijing and Tokyo as demand for safe-haven assets waned, yet investors remained on edge due to lingering concerns about growth and the health of the financial sector.
European stocks rose 3 percent sharply after shedding nearly 10 percent over the last fortnight, mirroring a bounce in Asia. Futures pointed to notional gains of 1.6 percent on Wall Street ESc1 but U.S. markets will be closed for a holiday.
"We had a very strong statement from the Chinese authorities signalling they are committed to a stable currency and that's helped sentiment ... safe-haven flows have unwound somewhat," said RIA Capital Markets strategist Nick Stamenkovic.
In China, spot yuan jumped more than 1 percent to 6.4934 per dollar - its firmest this year - as the People's Bank of China set its daily midpoint 0.3 percent stronger and the head of the bank was quoted as saying speculators should not be allowed to dominate market sentiment.
A stronger yuan reduces the risk that China will export deflation to the world, while worries about consumer price growth have also been helped by bounce back in the oil price.
Strategists cautioned that Monday's rebound may prove short-lived, over concerns that central banks have little ammunition left to fight off the heady mix of an oil-induced deflationary forces, capital outflows and economic weakness in China, and pressure on the world's financial sector. 1
STOXX +3%
DAX +2.6%
FTSE +2%
Oil prices rose 1.4 percent on Monday on news that ministers from Saudi Arabia, Russia, Qatar and Venezuela would hold a previously unpublicised meeting in Doha this week, adding to speculation of a global output deal.
Brent Oil $33.83
Iron Ore +6% @ $46.26US
Gold prices are starting the week under modest pressure as U.S. markets are closed for the Presidents Day long weekend.
After seeing its best week since 2011, gold hit a low of $1,202.7, Monday, in a light trading activity. In electronic trading, April Comex gold futures last traded at $1,208an ounce, down $31 on the day.
The selling pressure Monday, is a continuation of the activity seen overnight during the Asian trading session as Chinese markets opened after being closed all week for Lunar New Year Celebrations.
Analysts weren’t surprised with the selling pressure during the Asian trading session. Sam Laughlin, precious metals trader at MKS Precious Metals, noted that when Chinese markets closed last week, prices were $60 lower. 2
HUI closed
AUD Gold $1693
AUD .7139
On Today
RBA meeting minutes, lending finance.
UK January inflation
US February homebuilder sentiment, US Treasury December net foreign securities purchases.
Have a good day
1 Reuters
2 *****
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