The Overnight Report: EU In Focus

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By Greg Peel

US and UK markets were closed last night for public holidays.

Over in Europe, attention centred on the results of the weekend’s EU elections. In the wash-up, Angela Merkel’s party won comfortably for Germany and Italian prime minister Mario Renzi’s party held off a populist challenger, which provided for a very positive session for Italian bank stocks.

There were nevertheless strong results across the region for protest parties, with anti-establishment groups growing in strength in France and Greece and euro-scepticism building in the UK. The future of the EU remains safe for now, but the power base of the establishment is weakening.

European stock markets responded positively to the status quo outcome, and the implication that no political disruption will prevent the ECB from announcing fresh stimulus at its June 5 meeting. Germany rose 1.3%, France 0.8% and Italy an exultant 3.6%.

With the two largest global financial centres closed, there was not a lot of action in other markets.

The US dollar index fell 0.1% to 80.29 and gold was steady at US$1292.50/oz. Gold’s ongoing stasis is becoming rather remarkable. The Aussie is 0.1% higher at US$0.9240.

The LME was closed. Spot iron ore rose US$1.10 to US$98.60/t.

The Nymex remains open electronically and the ICE is nothing but electronic. West Texas crude fell US15c to US$104.22/bbl and Brent fell US29c to US$110.30/bbl.

The SPI Overnight rose 7 points.

There’s a raft of US economic data ready to come out tonight including house prices, durable goods and consumer confidence which should rev up the action once more. But not before ALS ((ALQ)) and Technology One ((TNE)) release profit reports locally today.
 

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