Business as Usual
In an emphatic rejection of terrorism, markets around the globe rallied despite the IS attack on western values. Although initially weak, European markets turned up and finished in the green. The positive momentum spilled into the US session, and local futures are pointing to gains of around 1% at the Asia Pacific opening. However, today’s market picture is clouded by mixed signals from commodity markets.
Oil and the energy complex rallied as commodity traders took an each way bet – either escalating conflict or a resurgent Europe could tip the supply overhang into deficit. Gold is slightly lower, rejecting any notion that investors may be seeking safe haven. Copper is the concern – it slid another 2% and is now trading at six year lows. Weakness in this key industrial input could temper enthusiasm in materials and industrial shares.
Weekly consumer confidence numbers and the release of RBA minutes are unlikely to shift trading sentiment. The last minute spurt in the overnight session indicates substantial short positions in index futures. Built up over the last two weeks, these positions may force a scramble in trading today.
Frequently Asked Questions about this Article…
Despite the IS attack on western values, global markets showed resilience and rallied. European markets initially appeared weak but eventually turned positive, and this momentum carried over into the US session.
Initially, European markets were weak following the IS attack, but they managed to recover and finish in the green, indicating a strong rejection of terrorism by investors.
Commodity markets are sending mixed signals. Oil and the energy complex have rallied, possibly due to concerns about escalating conflict or a resurgent Europe affecting supply. However, gold prices have slightly decreased, and copper has dropped to six-year lows.
Copper's price decline is significant because it is a key industrial input. Its drop to six-year lows could dampen enthusiasm for materials and industrial shares, affecting investor sentiment in these sectors.
Local futures are pointing to gains of around 1% at the Asia Pacific market opening, following the positive momentum from European and US markets.
The release of RBA minutes, along with weekly consumer confidence numbers, is unlikely to shift trading sentiment significantly, according to the article.
The last-minute spurt in the overnight session suggests that there are substantial short positions in index futures, which have been built up over the last two weeks. This may lead to a scramble in trading today.
Gold prices are slightly lower, indicating that investors may not be seeking it as a safe haven despite global uncertainties. This could be due to the positive momentum in other markets overshadowing the need for traditional safe-haven assets.
Call 1300 880 160
Start a chat
Schedule a call
