Asian markets revel in historic Wall Street session

15.26 AEDT, Wednesday 6 March 2013

Asian markets revel in historic Wall Street session
By Tim Waterer (Senior Trader, CMC Markets)

The Australian Dollar continues to mount a recovery effort receiving further leg-up from the latest GDP data. While the GDP figures were not exactly outstanding, equally they were not reflective of an economy in desperate need of further rate cuts and so from an Australian Dollar point of view this was a moderately positive event.

The AUDUSD pushed towards 1.03 today with the GDP providing no downside surprises while also keeping the AUD supported was a general push for yield in the market following the bumper gains on Wall Street. However, US Dollar strength is limiting upside moves in the AUD. The US Dollar appears to be in a transition phase with the currency becoming more receptive to positive economic events, a situation which may have implications on the upside potential for commodity prices even in a pro-risk environment.

Asian markets revelled after the historic session on Wall Street, with investors firmly in buying mode today. While there was no shortage of green numbers across the region today I am sure there were more than a few traders asking themselves if the market truly belongs at these levels. Momentum does continue to favour risk assets but despite the Dow hitting an all-time high I don’t think anybody is ready to start popping the champagne corks just yet. Thoughts of a correction still loom.

With the Dow having hit an all-time high, traders on the Australian market did not need a second invitation to join in on the proceedings with the ASX200 surging through 5100 with aplomb. It was a well-rounded performance from the market today with all the big name blue chips having solid outings. With the latest GDP data coming and going without incident traders were given no reason to pull the reins.

ENDS

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