Materials sparkle in morning session
By Niall King (Premium Client Manager, CMC Markets)
The local sharemarket has followed up yesterday’s gains with a sparkling early session performance, picking up on the
latest wave of positivity from the northern hemisphere. The Materials sector is leading the surge with RIO, BHP and FMG
all notching up impressive gains so far, while the major banks are not far behind. With US markets enjoying the
Independence Day holiday, the baton for sentiment direction was picked up by the Europeans. Re-affirmed commitment to
monetary easing by the ECB and Bank of England sent European equities into raptures overnight, with investors looking to
lean on cheap money.
In early trade this morning, the Aussie dollar is back in mid-US 91 cent range, despite key figures appearing eager to
talk the unit into submission earlier in the week. With local policy makers content to hover the axe over interest
rates, and anxiety intensifying around Chinese growth prospects, short-term downward pressure on the Aussie looks set to
continue should we receive a strong employment reading from the US tonight. A weaker payroll on the other hand could
jolt the ‘oversold’ camp into action and with it, a bounce in the Aussie.
With US Non-Farm payrolls topping the bill on the imminent economic data front, investors have plenty to ponder. Recent
volatility looks set to continue into next week as market participants look to crucial economic releases both
domestically and from China, to answer increasing questions about the health of the Australian economy and its largest
trading partner.
ends