A sharp rally in gold prices overnight with the yellow metal hitting a high of $1.319.70, provides European share markets, particularly precious metal stocks, with a degree of support early Monday. Asian shares were mostly mixed with Japanese stocks losing a bit of momentum following a rise in the yen. Japan’s Nikkei 225 index started Monday’s session sharply higher however as PM Shinzo Abe claimed victory in the upper house elections with relative ease, paving the way for his Abenomics framework to be implemented without the kind of opposition it was previously facing in Japan’s government. Chinese stocks drifted lower with investors continuing to assess the PBoC’s move last Friday to ditch the lending floor on commercial interest rates, a move seen as a liberalisation of the tightly controlled rates market which could see the government in China implement pro-market measures. On the euro zone front, some attention will be on Portugal’s political situation after the country’s PM over the weekend said he wanted coalition government to stay on track of its bailout as he was given additional guarantees from two of the government parties. Looking ahead, there’s little on the economic agenda with only US existing home sales later this afternoon worth nothing. Earnings out of Europe may shake up price-action, particularly the banking sector after UBS pre-announce earnings early, reporting numbers which beat market estimates. UBS shares are currently up 3%. Deutsche Bank meanwhile may gets some attention on reports the bank plans to downsize its balance sheet by as much as a fifth in order to comply with future regulation. Later in the US, we have numbers from McDonalds, Hasbro and Halliburton. ________________________________________ Ishaq Siddiqi Market Strategist
Posted on: Mon, 22 Jul 2013 07:09:02 +0000