FTSE -21 points at 7020
DAX -23 points at 11445
CAC +2 points at 4835
Euro stoxx -2 points at 3268
Asian traders showed little appetite in stocks. Oil and commodities softened.
Nikkei (-0.09%) and Topix (-0.07%) were offered during the majority of the trading session in Tokyo, and then pared losses into the session close. Japan announced its plan to reach a record 97.45 trillion yen ($830 billion) in fiscal spending. According to latest news, the government will increase spending in public work and defense. At the same time, the Ministry of Finance will also reduce the issuance of JGBs that will mature in 2017 and 2018. In summary, Japan will remain loose, yet there could be a shift from the monetary to fiscal action to help boosting recovery and bringing back the inflation to the mid-term target of 2%.
The yen remained soft against the US dollar. The USD/JPY traded in the tight range of 117.41/117.75. The possibility of further rise to 120.00 is still on the cards, yet thinned holiday volumes could prevent the pair from a successful attempt to the upper zone before Christmas.
Australia’s ASX 200 (+0.54%) diverged positively for the third consecutive session. The food & beverage stocks were on the rise at today’s session despite the ongoing Bellamy’s crisis, while mining and energy stocks traded in the red. Bega Cheese (+5.96%) gained as the company kept its earnings guidance unchanged on solid China demand, whereas A2 Milk Company Ltd (AX:A2M) (-2.90%) ranked among the leading losers.
The short covering in the euro continues approaching the holiday session. The medium term bias remains in favour of the greenback, solid offers are eyed at 1.0475 / 1.0500 (minor 23.6% retracement on the sell-off following the European Central Bank and Federal Reserve meetings) and 1.0550 (major 38.2% retrace) which should distinguish between a short-term bullish reversal and a consolidation of the actual negative trend. The EUR/GBP is gaining some upside momentum above the 200-day moving average (0.8396), as the pound is trapped in month-low levels against the US dollar.
The pound remains weak against the broadly softer US dollar. There are too many reasons for GBP-bears to stay in charge. German Chancellor Angela Merkel hardened the tone regarding the Brexit by opposing to any agreement in the car industry, before sealing a deal. Year-end settlement at 1.2300/1.2250 is reasonable.
The FTSE futures (-0.19%) traded south in Asia, while the DAX futures remained flat (+0.01%).
The FTSE 100 is called 21 points lower at 7020 pence at the open. The DAX is expected 23 points down.
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