Risk and Relax

A better, albeit shortened, trading week beckons following gains in US and European shares on Friday night. The local futures expiry last week, and fairly clear market calendar mean trading is likely to quieten down with a positive bias as investors prepare for the Easter long weekend.

A better, albeit shortened, trading week beckons following gains in US and European shares on Friday night. The local futures expiry last week, and fairly clear market calendar mean trading is likely to quieten down with a positive bias as investors prepare for the Easter long weekend.

Futures markets are pointing to a lift of around 0.5% at this morning’s open. However a lack of potential de-railers this week could see higher levels, especially if the Australia 200 index can clear 5,200 convincingly. The higher AUD is complicating matters, but may be a source of support if international investors believe the rise in the currency will continue. Banks may receive support after comments last Friday from the RBA’s Dr Ellis that housing in Australia appeared stable.

Mixed commodity moves may muddy the waters. Iron ore is up, but oil is down. Gold is holding firm above US $1,250. The Materials and Energy sectors led the gains last week, but may be overtaken in trading today. The mid-session release of China’s March business activity indicator may get see more commodity price co-ordination.