Intervention talk dominates global markets

 

There was mixed trading in Asia overnight as the markets await the release of the Federal Reserve minutes tomorrow and as investors mulled over the comments made by the European Central Bank indicating that the media talk suggesting that the ECB was to going to purchase government debts to help lower the cost of borrowing, were in fact, misleading.

At the time of writing the Nikkei 225 was up 0.23%, South Korea’s Kospi Index rose 0.5% Australia’s S&P/ASX200 was up 0.58% but Hong Kong’s Hang Seng index was down 0.13% as the regional benchmark index headed towards a three month high. Driving the markets in Asia was the world’s second largest economy – China – moving to alleviate a cash crunch. China’s nation’s central bank increased its reverse-repurchase operations overnight to alleviate a cash crunch, injecting 150 billion yuan using one week contracts and a further 70 billion yuan via 2 week agreements, making this the biggest cash injection since the 3rd of July.

Investor focus is once again on troubled Greece as Greek Prime Minister Antonis Samaras is set to get together with his German and French counterparts this week with the main point of discussion being whether or not Greece has done enough to receive the next tranche of funds – 31.5bn euros. Inspectors from the EU, IMF and the ECB will make public their report in September on the spending cuts and the efforts by Greece to raise revenues by reducing tax evasion and selling off state assets.

It is expected that Greece will ask for more time to implement the terms of the bail out which has caused some discord amongst key Euro decision makers, particularly in the powerhouse of the Eurozone – Germany, with German foreign minister Guido Westerwelle stating that a “softening” of the reforms was not permitted.

Today

Much of the investor focus is still on the minutes being released by the Fed reserve on Wednesday which will hopefully confirm that the world’s largest economy – the US – is on the road to economic recovery. With yet another quiet day on the economic calendar – oil and gas stock figures in the US may install some movement into the commodity markets