ASX200 - Why Is The Australia Market Suffering? Weekly Outlook with Peter Esho

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• published: 09 Jun 2015
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Join Peter Esho as he details the key market events for the week ahead and the critical macro economic data for the week starting 9th of June 2015. Is the ASX 200 index in Australia amongst the worst performing indices in the developed world? That is the conversation we have been having on the desk this week. It is also something that we published quite extensively onto the Invast blog. The Australian market as measured by the ASX 200 index is now at a very similar level to where it was in November 2013. The Aussie market has really been stuck in a wedge and we think that this is a function of commodity prices remaining depressed. But we have seen over the past week and what has been one of our key focuses particularly at Invast has been the Iron ore price somewhat stabilizing above US$60 per ton but the Australian dollar has also pulled back. That implies an Australian Iron ore price in excess of AU$80 per ton. That is very supportive for the Iron ore stocks but Copper which is the key technical indicator is called Dr. Copper. It is seen as the main indicator for the commodities in the mining space. That remains very depressed and whether the rest of the Australian mining stocks hence the impact on the ASX 200 index. There is also been greatest scrutiny on the Australian banks. The largest stock on the Australian market is the Commonwealth Bank of Australia. Four out of the largest five stocks, the top five stocks on the Australian markets are banks. And what we have seen from the banks over the past couple of weeks is a tightening in their credit lending criteria particularly in the investment market. That combines with overall gloom around the world, poor off-shore leads, uncertainty in Europe particularly around the Greece situation, a pullback in the Dax has all compounded to put pressure on the ASX 200 index. We started out our discussion with that point, it is one of the key products, one of the key markets that are traded here at Invast and that remain our key focus over the next few weeks. As we said the Australian dollar is back below, the ASX march now comfortably sitting within the 75-80 cent level. Our focus over the next few weeks will be on the Copper price where it finds a bottom and where it takes the rest of Australian market with it. Remember we have published our Monthly Investment Committee Outlook last week. If you have not sourced that document make sure you speak to the Invast staff and they will be more than happy to pass that through you. CONNECT WITH INVAST TODAY Facebook ► https://www.facebook.com/invastglobal Twitter ► http://twitter.com/InvastGlobal Linkedin ► http://www.linkedin.com/company/invast Invast ► http://www.invast.com.au Google+ ► https://plus.google.com/+InvastAu/