Daily Market Reports | May 31 2011
By Greg Peel
The US was closed for Memorial Day and the UK was closed for a bank holiday so there was very little else going on across the globe last night. The German DAX was little changed.
The Greek rumour mill kept churning nevertheless, and it seems German magazine Der Spiegel always manages to come up with something controversial. This time a story in regards to the IMF update report due this week suggested Greece would be found to have missed all the fiscal targets set for it under the conditions of the original bail-out.
The report was immediately denied by the IMF, the ECB and the Greek government.
However, another report in the London Financial Times suggested that European leaders are trying to negotiate a new bail-out deal for the stricken eurozone member that would involve wider outside intervention in the country's finances, including international scrutiny of tax collection and private asset sales. A fresh round of strict austerity measures would also be imposed, and Greek bond holders would be encouraged to accept an extended payment schedule. Greece would also need to borrow another E35bn or so.
The rumour mill can churn but we shall shortly learn the truth. In the meantime, subsequent weakness in the euro saw the US dollar index rise 0.2% last night to 74.93.
Gold rose US$2.60 to US$1539.10/oz and silver added US11c to US$38.07/oz.
Base metal and US oil and gas markets were closed but on the International Commodity Exchange, Brent crude fell US42c to US$114.54/bbl.
The Aussie fell 0.3% to US$1.0680, aided by yesterday's weaker than expected March quarter corporate profits result which implied a lower than expected GDP result might eventuate tomorrow.
Despite a lack of action elsewhere, the SPI Overnight managed to rally 14 points or 0.3%.
March quarter exports will be in focus today, as will monthly private sector credit. The next RBA meeting is today week.
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