Originally published by CMC Markets
The S&P/ASX 200 index continues to languish nervously near the lower part of its recent trading range.
Selling momentum in both major US tech stocks and iron ore eased over the past 24 hours. This will take the pressure off this morning’s opening. However, neither the US FANG stocks nor iron ore exhibited the kind of robust turn around needed to inspire confidence that the recent sell-off has finished. Australian mining stocks continue to edge lower in a vote of no confidence in yesterday’s spot iron ore rally
Commonwealth Bank Of Australia (AX:CBA) shares broke below recent lows yesterday finishing down 0.9% and on the low for the day. This indicates the possibility of further selling to come and could be a drag on the ASX 200.
Janet Yellen’s speech has changed minds on the prospects of a December rate hike and therefore on the outlook for the $US. In a key development for chart followers, EUR/USD broke below chart support last night, improving the outlook for US dollar bulls. The Fed, like everybody else is uncertain about whether current economic growth is in fact enough to push inflation back to target in the foreseeable future. However, it seems likely that it will continue to lift the Fed Rate gradually higher to say around 2% before waiting to see what happens.
The meeting between the government and gas producers appears to be shaping into an issue about whether the government will effectively intervene in an attempt to control prices. For the share market, the question may be the extent to which the shareholders of Origin (AX:ORG) and Santos (AX:STO) may be disadvantaged to the benefit of the shareholders of major energy consumers like Bluescope Steel (AX:BSL).