Cautious end to the week looks likely
After three days of good gains, markets are likely to baton down the hatches as we head into the now familiar routine of a weekend with potential to create Greek induced risk and volatility next week. Having rallied to reflect consensus views that Monday’s negative market reaction to the situation in Greece was overstated, traders may be a little more cautious today. Both the result of Sunday’s referendum and its immediate consequences remain difficult to assess.
Mining stocks will be a focus in today’s trading. Despite the decline in iron ore prices, the major miners appeared to be swept up in the yesterday’s general recovery in stock prices. Whether they can maintain these gains in the face of another significant drop in the spot iron ore price yesterday may be a key issue for the ASX 200 index today.
Fed chair, Janet Yellen has made it clear that wage growth will feature heavily in her assessment of when to start lifting rates. While recent improvement in other US economic data has shortened the odds of a September rate hike, the average hourly earning’s growth data released with last night’s jobs report remains soft and creates an element of doubt about a September rate hike.
Markets will be looking for signs that the accelerated small business depreciation allowances announced in the May budget will begin to show up in May’s retail sales figures. A strong result from this morning’s data will be supportive for the Aussie Dollar.
For further comment from CMC Markets please call 02 8221 2137.
Frequently Asked Questions about this Article…
Markets are likely to be cautious due to the potential for Greek-induced risk and volatility over the weekend, which could impact trading next week.
Despite a decline in iron ore prices, major mining stocks have been part of a general recovery in stock prices. However, their ability to maintain these gains is uncertain given the recent drop in spot iron ore prices.
The situation in Greece contributes to market volatility as traders assess the potential outcomes of the Greek referendum and its immediate consequences, which remain difficult to predict.
Janet Yellen is focusing on wage growth as a key factor in deciding when to start lifting rates. Although other US economic data has improved, soft average hourly earnings growth creates uncertainty about a September rate hike.
Markets are looking for signs that the accelerated small business depreciation allowances from the May budget will positively impact May's retail sales figures, which could support the Aussie Dollar.
The US jobs report, particularly the average hourly earnings growth data, influences market expectations regarding the timing of a potential rate hike by the Federal Reserve.
The ASX 200 index is monitoring mining stocks because their performance, influenced by fluctuating iron ore prices, could significantly impact the index's overall movement.
Investors can stay informed by contacting CMC Markets for further commentary at the provided phone number: 02 8221 2137.
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