X

Select the account you'd like to open

Rallies to the rescue

Signs of a Catalan separatist back down and stronger US data fuelled a rally in risk assets across the spectrum in overnight trading. Many Asia Pacific markets remain closed today, but the rally couldn’t come at a better time for Australian investors. Currency markets are dominated by a strengthening US dollar, pushing the Australian dollar below 78 US cents.

Catalan separatists signalled a deferral of a declaration of independence following reports local banks were preparing to leave the region. Spain’s IBEX index rallied 2.5% in response, taking most continental exchanges into the green. US jobless claims and durable goods orders outstripped forecasts, pushing the S&P 500 index to yet another record high.

The enthusiasm spread to industrial commodities. WTI crude oil sprang back over $50 a barrel, and copper markets in London and Chicago surged almost 3%. In contrast more defensive gold and bond markets came under further selling pressure. A strengthening US dollar indicates the lift in risk appetites is largely due to the better than expected US data.

The gains come as the Australia 200 Index sits on the edge of a precipice. It closed yesterday at 5651.8, less than 2 points above a key support level. If local traders follow the global impulse shares should find safer, higher ground. However on two days of three this week the index bucked positive leads. If it does so again today chartists will take it as a sign of further falls to come.


Disclaimer: CMC Markets Singapore may provide or make available research analysis or reports prepared or issued by entities within the CMC Markets group of companies, located and regulated under the laws in a foreign jurisdictions, in accordance with regulation 32C of the Financial Advisers Regulations. Where such information is issued or promulgated to a person who is not an accredited investor, expert investor or institutional investor, CMC Markets Singapore accepts legal responsibility for the contents of the analysis or report, to the extent required by law. Recipients of such information who are resident in Singapore may contact CMC Markets Singapore on 1800 559 6000 for any matters arising from or in connection with the information.