Global Markets Overview – June 20, 2014

US equities inched higher yet again after a strong recovery off the lows. Unemployment claims and the Philly Fed manufacturing index continued to show good signs that the US economy is in a recovery. While equities continued to eke out gains, the highlight of the session was the rally in gold. After testing a key downtrend resistance twice this week, gold was finally off to the races after breaking this downtrend. With the Fed maintaining its dovish stance and Europe ready to provide unprecedented stimulus, gold has started to look attractive again.

The market clearly went into the Fed meeting expecting an acknowledgment of recent inflation forces and didn't get them. In fact, Yellen said the recent pick-up in inflation was just 'noise'. In fact, it's not just gold, as silver also got a big boost and rallied around 4%. This line had been in place since April and capped any further gains. The break was very convincing and gold managed to knock out 1300 and extended this gain to a high of 1322.

While it is tempting to chase the price higher, perhaps waiting for pullbacks before buying gold is a more sensible strategy. On the weekly chart, it seems the precious metal is now facing another test with a downtrend resistance in play.

FX moves limited

Moves in the FX space were quite subdued with most of the major currency pairs just holding tight ranges. Perhaps GBP/USD's move above 1.70 was the most significant move although it wasn't accompanied by any strong momentum. AUD/USD goes into today's trade just shy of 0.9400 and continues to find buyers on pullbacks, particularly into the 0.9300 region. Meanwhile, USD/JPY hasn't managed to bounce back above 102 and the yen will be back in focus today with comments by BoJ Gov Kuroda set to hit the wires at around 16.30 AEST. The Nikkei is pointing to a 0.3% rise at the open and with data quite limited around the region, Japan could potentially be a focal point today.

Weaker open for the ASX 200

Ahead of the open we are calling the ASX 200 down 0.2% at 5458. The market is now up around 1% for the week after having struggled for most of it. After yesterday's rally, which was partly a result of some options expiry related moves, it's not surprising to see the market facing a bit of a pullback. However, it seems a degree of confidence could be returning to the market and perhaps this will help keep the momentum going today.

There are some very encouraging signs in the commodities space, with gold and iron ore both gaining some ground. As a result it could be another materials-led rise today. Fortescue in particular will be interesting to watch after yesterday's thumping performance helped by news that Andrew Forest bought 1.75 million shares in the company. Elsewhere, there will be plenty of focus on the Westfield Retail shareholder vote.

Asian markets opening call	Price at 8:00am AEDT	Change from the Offical market close	Percentage Change
Australia 200 cash (ASX 200)	5,458.00	-10	-0.18%
Japan 225 (Nikkei)	15,372.50	12	0.07%
Hong Kong HS 50 cash (Hang Seng)	23,218.70	51	0.22%
China H-shares cash	10,386.60	3	0.03%
Singapore Blue Chip cash (MSCI Singapore)	371.00	-2	-0.48%
US and Europe Market Calls	Price at 8:00am AEDT	Change Since Australian Market Close	Percentage Change
WALL STREET (cash) (Dow)	16,901.10	-3	-0.01%
US 500 (cash) (S&P)	1,957.39	-1	-0.05%
UK FTSE (cash)	6,808.40	-9	-0.13%
German DAX (cash)	10,003.10	3	0.03%
Futures Markets	Price at 8:00am AEDT	Change Since Australian Market Close	Percentage Change
Dow Jones Futures (June)	16,900.00	0.00	0.00%
S&P Futures (June)	1,957.88	-0.50	-0.03%
ASX SPI Futures (June)	5,433.50	0.00	0.00%
NKY 225 Futures (June)	15,388.00	5.00	0.03%
Key inputs for the upcoming Australian trading session (Change are from 16:00 AEDT)	Price at 8:00am AEDT	Change Since Australian Market Close	Percentage Change
AUD/USD	$0.9398	-0.0017	-0.18%
USD/JPY	¥101.955	0.140	0.14%
Rio Tinto Plc (London)	£31.10	0.31	0.99%
BHP Billiton Plc (London)	£19.07	0.32	1.71%
BHP Billiton Ltd. ADR (US) (AUD)	$36.44	0.01	0.04%
Gold (spot)	$1,321.75	43.15	3.37%
Aluminium (London)	1888.25	17.25	0.92%
Copper (London)	6734.5	16.50	0.25%
Nickel (London)	18571	-36.00	-0.19%
Zinc (London)	2159.75	27.75	1.30%
Iron Ore (62%Fe)	90.7	0.40	0.44%