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Still cautious

While futures markets are anticipating a firm opening for the stock market, it seems unlikely buyers will be too aggressive ahead of what could be a horrible weekend. Many world markets are now parked around key levels as they wait on Hurricane Irma and the possibility of another North Korean missile test.

This week the ASX 200 has shown signs of rallying off support around 5650. However momentum has been low and the move has been unconvincing. Bargain hunters may prefer to wait and see what North Korea does this weekend before acting.

Sizeable moves in forex markets last night point to the fact that traders were wrong footed when Mario Draghi declined to make any meaningful attempt to jawbone the Euro lower. This has seen both the Euro and Aussie Dollar approach but not exceed recent highs. Both currencies are now delicately positioned. Recent weakness in the iron ore price makes the Aussie vulnerable if weekend events do not lead to significant “risk off” selling of $US.

Press reports that Amcor is considering a bid for US packaging group Bemis may cause some nervousness until either details of the bid emerge or it is ruled out.  This morning’s statement from Amcor does not rule the possibility out although it seems that any consideration of a takeover is not sufficiently advanced to warrant disclosure. 

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