FYI | Jun 07 2010
Michael McCarthy, Head of Dealing, Asia Pacific at City Index sent out the following message to clientele this morning:
Once again, the data muddies the picture. Non-farm payrolls released in the US on Friday night disappointed the market. When temporary jobs relating to the US census are stripped from the data, jobs growth for May was modest. The market reaction was swift – commodity and equity markets plummeted, and (ironically) the US dollar and gold rose as investors moved away from riskier, growth related assets.
However, the focus on and reaction to a single monthly reading is in danger of being overdone. Earlier in the week in Australia, we saw GDP and price data suggesting that a recovery is gaining traction in the “real” economy. This fits with our view data is likely to remain mixed as the global economy makes a patchy and variable recovery – rather than a “v-shaped” recovery. We therefore expect markets to trade ranges, rather than sustain trends.
Given our view, today’s likely weak opening in the Australian share market could push the Australian 200 CFD towards the bottom of a range, and therefore represent a buying opportunity.
The above view has been communicated to City Index clients first. All copyright City Index. All investors should note: Trading involves risk. The material provided here is for general information purposes only, and does not take into account your personal financial circumstances or need.
McCarthy, along with other market commentators and investment specialists, shares his views with readers and subscribers at FNArena on irregular basis. The views are his and not FNArena's (see our disclaimer).
Cityindex.com.au
