Action in Asia portends a strong open in Europe and North America

| 12 October 2008 20:37

Looking at the action in overnight trading, I see a very strong move to the upside in the offing in equity markets worldwide. All of the data is looking bullish. In Australia, the All Ordinaries is up five percent led by banking shares. In Singapore, the Straits Times is up 1.5% as well. Dow Futures are up over 200 points.

In currency markets, the Euro is up the most in three months as currency traders seem heartened by the EU moves at the weekend.

The real question is how credit markets react to the EU crisis response and whether we see risk spreads come down to more reasonable levels. The overhang due to the renegotiation of Morgan Stanley’s equity deal with MUFJ is also another potential worry yet to be put aside.

But, all in all, we should see a very good rally on Monday.

Sources
Australian stocks rebound, led by banks – SMH
Euro Rises Most in 3 Weeks as European Leaders Guarantee Banks - Bloomberg
Straits Times Index quote – Yahoo! Finance
Morgan Stanley Talks Lead Weekend of Emergency Discussions – Deal Book
Pre-Market Trading – CNN Money

avatar About Edward Harrison

Edward Harrison is the founder of Credit Writedowns and a former career diplomat, investment banker and technology executive with over twenty years of business experience. He is also a regular economic and financial commentator on BBC World News, CNBC Television, Business News Network, CBC, Fox Television and RT Television. He speaks six languages, a skill he uses to provide a more global perspective. Edward holds an MBA in Finance from Columbia University and a BA in Economics from Dartmouth College.

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