The SFE Futures suggested a 10 point rise in the market this morning. BHP and RIO both down in ADR form overnight, down 0.78% and 3.66%. BHP closed at the equivalent of 3555c, up 44c on last night’s close. Metals up – solid night – Aluminium up over 5%. Oil price up 4% or $2.66 to $68.80. Gold up $16.70 to $982.30. A 3 Month high. Bonds down – 10 year yield at 3.716% up from 3.551%. A$/US$ hovering just over 80c at 80.24c. VIX Volatility Index still above 30 – down 2.71% to 30.18.
Obama opens the door to better US Islam relations with a speech in Cairo. The Bank of England and the European Central Bank (ECB) left interest rates unchanged at 0.5% and 1.0%. ECB President Trichet argued that the worst of the recession had passed and hinted that the bank had no immediate plans to cut interest rates further.Fitch Ratings reiterated its confidence in the top credit grades for the US and UK.
Energy sector up 2.0% on a strong oil price that touched $85. Goldman Sachs in the US put out research saying the oil price will hit US$85 this year. Metal prices up but resources down. The RIO deal with Chinalco has disintegrated. They have announced a JV in iron ore with BHP, a US$15.2bn rights issue and a dividend cut. RIO was down 10% in the UK at one point. Closed down 6.59%. Most of the resources sector fell over in anticipation of a US$10bn cash call/rights issue from RIO. CRB Commodity price index up 2.6%.
Financials up 4.0% on some positive broker research. Jobless numbers fell slightly in line with expectations. Jobs numbers tonight. Boeing up 5% on hopes of a United Airlines order for 150 planes. May retail sales data below expectations – Retialers fell. Bonds fell. 10 year yield to 6 month highs again.
The market is up 49 this morning. 41 points are thanks to BHP and 8 points thanks to RIO. In other words without those two the market would be flat. Our market is closed on Monday – Queen’s Birthday holiday.
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