There was nothing in overnight market news likely to change the outlook for Australian investors this morning. This suggests that while the market may open on a firm note, the most likely scenario for today's trading is another day of consolidation.
There was nothing in overnight market news likely to change the outlook for Australian investors this morning. This suggests that while the market may open on a firm note, the most likely scenario for today’s trading is another day of consolidation. In the last two days, the ASX 200 index has traded inside last Tuesday’s range and seems likely to remain there today. A potential assault on the 6000 high will be left to next week.
Jaded resource investors will be relieved that both iron ore and oil managed to hold the line in the latest trading session. However, large supply surpluses overhang both these markets and the risk of further price pressure remains front of mind for potential buyers.
China’s inflation data is expected to show the ongoing impact of oversupply in its property market and heavy manufacturing sector. While in the big picture, the inflation rate remains well below the official target rate, markets are still likely to be sensitive to small deviations from expectations in today’ s figure. A slightly better than expected number would build on a similar outcome last month and would be seen as evidence that the risk of low price growth is starting to be contained. However, a lower than expected outcome could add to ongoing market concerns about the medium term growth outlook for China’s economy.For further comment from CMC Markets please call 02 8221 2137.