daytrade diaries... february 11, page-3

GOOD MORNING ALL, PJ HLL,...HERE'S AN OVERNIGHT MARKET UPDATE:

> The Australian SPI 200 Mar 10 futures contract was up 16 points or 0.4% to 4497.

> And the US equities fluctuated overnight as investors weighed up the prospects of an EU bail out for Greece, offsetting Bernankes comments about raising discount rates. At the time of writing, the DJIA was down 0.1% to 10044, the S&P 500 lost 0.1% to 1069 and the Nasdaq was 0.1% lower at 2149.

> While the European equities advanced for the third consecutive day amid speculation that the EU may help support Greeces finances, easing concern a sovereign default could hamper the economic recovery. The DJ Euro Stoxx 50 rose 1.2% to 2700, the German DAX gained 0.7% to 5536 and the FTSE was 0.4% higher at 5132.

> It was a positive night for the USD after US Fed Chairman Bernanke spoke about the possibility of raising discount rates. EUR/USD dipped to a low of 1.3676 overnight, the cross managing to gain some ground back and open higher around 1.3740. GBP/USD opens weaker at 1.5580 declining steadily overnight and the USD/JPY opens higher at 89.89, trading sideways for most of the session.

> The Australian bond futures moved in line with US Treasuries. The implied yield on 3-year bond futures was up 3bps to 4.830% (price down 3bps to 95.170) and the implied yield on the 10-year bond futures gained 4bps to 5.550% (price down 4bps to 94.450).

> The AUD weakened against major crosses overnight with markets shying away for the risky asset. AUD/USD opens marginally lower at 0.8755 after a range-bound session. AUD/EUR opens above 0.6370, gaining 0.5% in last nights trade. AUD/JPY opens at 78.81 and the AUD/NZD cross opens at 1.2620 trading sideways overnight.

> And the US bond yields were higher overnight after US Fed Chairman Bernanke said policy makers may raise the discount rate charged on direct loans to commercial banks as economic stimulus measures are unwound. The US Treasury sold $25bn of 10-year notes at a yield of 3.692%. The yield on 2-year notes rose 4bps to 0.867%, whilst the 10-year yield gained 4bps to 3.690%.

> Meanwhile crude oil rose as the US froze assets of four companies connected with Iran, heightening tensions. WTI futures contract for Mar 10 gained 0.9% to US$74.42 a barrel.

> And Spot gold declined as the strengthening US dollar eroded the appeal of the precious metal as an alternative investment. Spot gold declined 0.5% to US$1,072.80 an ounce.

> Also, the US wheat gained 3.0% for the second time this week, the commodity falling 11% since the end of last year prompting markets to reduce bets of any further declines. Soybeans rose 1.5% with prices remaining near a three-month low, boosting demand from processors to make animal feed and vegetable oil and Corn gained 1.0%. Sugar lost 1.6% on speculation that the recent rally is overdone. Palm oil futures were 0.1% higher.

> Finally, the LME copper decreased 0.8% to US$6,535 as the US dollar rallied. Other base metal futures traded mixed with zinc, lead and nickel increasing 0.5%, 0.6% and 0.9% respectively and aluminium decreasing 1.0%.

GOOD LUCK TO ALL TRADERS!

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