Australian Stock Market Report 05/31/2011
According to a report by Reuters, EU officials are drafting a second bailout package for Greece in an attempt to prevent the country defaulting on debt next month. Chairman of Euro zone finance ministers, Jean-Claude Juncker, expressed optimism about aid after a meeting with the French president.
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European shares eased in thin, holiday-affected trade on Monday. Shares in German nuclear power plant operators fell after the German government said it would close all its nuclear reactors by 2022. RWE fell by 1.7pct with E.ON down 2.3pct. The FTSEurofirst index fell by 0.2pct with the German Dax down 3pts or less than 0.1pct. The UK sharemarket was closed for Spring Bank Holiday.
US sharemarkets were closed for the Memorial Day holiday on Monday. Last week the Dow Jones fell by 0.6pct with the S&P 500 and Nasdaq both down 0.2pct.
The resources-dependent Canadian (Toronto) sharemarket rose by 32pts or 0.2pct on Monday.
The US government bond market was closed for the Memorial Day holiday on Monday. Last week US 2yr yields fell by almost 3pts to 0.48pct and US 10yr yields fell by 8.5pts to 3.07pct.
The US dollar edged modestly higher against major currencies in thin European and North American trade on Monday. The Euro eased from US$1.4290 to US$1.4260 before ending overnight trade at US$1.4275. The Aussie dollar eased from highs near US107.00c to near US106.65c before ending overnight trade around US106.80c. And the Japanese yen eased from 80.75 yen per US dollar to JPY80.95, ending overnight trade near its weakest levels.
Crude oil prices eased modestly in thin trade on Monday. Traders are awaiting key US employment data this week and watching developments in the European debt crisis. In electronic trade the US Nymex crude oil contract fell by US21c or 0.2pct to US$100.38 a barrel. London Brent crude fell by US35c to US$114.54 a barrel. Last week Nymex crude rose by 1.1pct.
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The London Metal Exchange was closed for the Spring Bank holiday. Last week metal prices were mixed. Zinc and aluminium rose more than 5pct but nickel fell 1.9pct and tin eased 0.9pct.
The gold price was little changed on Monday, affected by holidays in the US and UK. Traders are focussing on the European debt crisis, upcoming economic data in the US, Europe and China and an increase in margins on gold and silver forward contracts on the Shanghai exchange on June 2. The spot gold price was up US$1.56 to US$1,537.95 an ounce. Last week the Comex gold price rose by 1.8pct.
Ahead: In Australia, data on home prices, building approvals, government finance, private sector credit and the current account deficit are all released. In the US, consumer confidence, the Case-Shiller home price series and Chicago purchasing managers index are all released. In India, GDP figures are released.