Australian shares this morning clawed back most of yesterday's losses as Asian markets welcomed last night's outbreak of euro-debt optimism.
At lunchtime the ASX 200 was ahead 58 points or 1.5% at 4064, with all sectors except gold trading higher. Financials +1.9% topped the sector gains as reaffirmed support for Greece from Germany and France overnight eased fears that Greece was lurching towards default, with potentially disastrous consequences for counter-parties around the globe.
"It seems that a near-term disorderly default is unlikely, with September's 8 billion euro disbursement probably to be made now that the [Greek] government has committed to further austerity measures," Laurent Fransolet at Barclays Capital told MarketWatch. However, "headline risk on the evolving situation in Greece is likely to continue to drive the market into the weekend."
US futures hovered in positive territory as Asian markets advanced. Dow futures were recently up 7 points or less than 0.1% as Japan's Nikkei added 1.67%, Shanghai fell back to break-even and Hong Kong's Hang Seng put on 0.52%.
The Australian dollar remained under pressure following changes to the way the Australian Bureau of Statistics measures inflation, which lowered the odds on further interest rate rises this year. Revisions to the ABS's consumer price index reduced the core inflation reading to 0.6% last quarter from 0.9% under the old methodology. The dollar was recently buying US$1.023.
"The revisions... are significant and are likely to help ease the RBA's concern over the medium-term inflationary outlook," 4Cast analyst Celeste Tay said in a note to investors quoted on Fairfax. "This latest revision to underlying inflation measures removes any possibility for a rate hike by year-end and clearly gives the bank more time to assess the most likely medium-term path for the domestic economy."
Crude oil futures advanced 10 cents this morning to US$88.61 a barrel. Spot gold eased another $6.60 to US$1,816.70 an ounce.
Not a bad morning, even if 4100 seems to be a ceiling for the XJO these last few days. (Any significance to that level, Barny?) Keep an eye on Shanghai - might be rolling over. Been a topsy-turvy week for this trader, with decent wins on Monday and Tuesday dented by a shellacking yesterday. An easier day today, with very modest scalps in OEX and PVM providing a day's wage.
