Greece and US interest rates remain the key focus
Markets seem to be exactly where they were last Friday as far as Greece is concerned. The world is waiting on another set of “last ditch” meetings with a general expectation that crisis will be averted but concerned that there is some room for doubt. The bottom line as far as today’s trading is concerned may be to leave both buyers and sellers cautious.
News that US personal spending in May showed the largest monthly gain since August 2009 suggests that US consumers are starting to re assert themselves as the engine room of world growth. A continuation of this trend brings a September rate hike by the Fed into focus.
US consumer strength and the potential for a relatively early start to Fed monetary tightening might create some short term nervousness about Australian bank shares which have enjoyed a significant recovery over the past three weeks.
Energy stocks may also be a negative in today’s market following a weak lead from the energy sector in the US as traders focus on the possibility of a significant increase in world supply if trade sanctions over Iran are lifted.
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Frequently Asked Questions about this Article…
As of the latest updates, markets are in a holding pattern regarding Greece's financial crisis. There are ongoing 'last ditch' meetings with a general expectation that a crisis will be averted, though there remains some room for doubt. This uncertainty is causing both buyers and sellers to be cautious in their trading decisions.
US consumer spending showed the largest monthly gain since August 2009, indicating that US consumers are reasserting themselves as a key driver of global economic growth. This trend is significant as it could lead to a September rate hike by the Federal Reserve, impacting global markets.
A potential rate hike by the Federal Reserve, possibly as early as September, could create short-term nervousness in the markets. This is particularly relevant for Australian bank shares, which have recently seen a significant recovery, as well as other sectors sensitive to interest rate changes.
Australian bank shares might experience nervousness due to the potential for an early start to Federal Reserve monetary tightening. This is because changes in US interest rates can influence global financial markets, including the performance of Australian banks.
Energy stocks may face challenges in the current market due to a weak lead from the US energy sector. Traders are focusing on the possibility of a significant increase in world supply if trade sanctions over Iran are lifted, which could impact energy prices and stocks.
If trade sanctions on Iran are lifted, it could lead to a significant increase in global energy supply. This potential increase is causing traders to be cautious, as it could affect energy prices and the performance of energy stocks in the market.
Investors should remain cautious given the ongoing uncertainty surrounding Greece's financial situation and the potential for a Federal Reserve rate hike. Monitoring developments in US consumer spending and global energy supply, particularly regarding Iran, will be crucial for making informed investment decisions.
For further commentary on these market developments, you can contact CMC Markets at 02 8221 2137 for expert insights and analysis.
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