Global markets taking monetary easing as a done deal continues to climb. Both oil and precious metal prices climbed to level not seen for the last months. Brent crude rose to 116, and gold flirting with 1700. Silver reached 32.20. EURO/USD is trading at 1.2617 making it likely that the EURO, in spite of a Moody down writing the Euro zone to negative, shall see 1,27 before the European Central Bank on Thursday will decide on whether to buy Spanish and Italian bonds aggressively.
The US markets were closed for Labor Day yesterday. The Asian markets were mixed going in and out of red territory. Oil prices were underpinned by expectations that weak data from China, the world’s second biggest oil consumer, would prompt Chinese authorities to ease credit policies further. Beijing has already taken decisive steps to encourage domestic consumption and lower interest rates. Israel’s stepped up war rhetoric against Iran, has increased tensions in the Middle East. This is impacting oil futures.
Gold and silver which are seen as hedges against unexpected moves in the currency market, are continuing to move upwards as are copper and soft commodities. Paring back of bearish bets against the Euro has probably helped bolster the single currency over the last days. There is also talk in the market that Asian players have been buying Euro against the Yen. The Japanese currency is stable against Dollar on 78,365. ECB President, Mario Draghi, stated yesterday that ECB purchases of sovereign bonds with up to three years maturity did not constitute state aid.
The Euro reached a two month high against the Australian dollar and rose 0,4 % against the yen. Investors continue to give the Australian dollar a cold shoulder on weaker growth in China and disappointing weak domestic retail sales.
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