Aussie Starts the Week With A Bang

While the economic calendar for Australia remained empty, Aussie and ASX had a good Monday, gaining on their Friday positions. The mover for Aussie was yet another speech by governor Stevens of RBA. ASX was driven, as usual, by rising commodity prices, namely oil and metals, as well as positive news about intelligent choices that Macquarie Airports is making. Both markets, joined by the bonds were also influenced by the US financial performance: Dow gaining 0.63% and 10-yr bond dropping 4.6 basis points to 5.171%. Some less positive news about future downward pressures on gold prices triggered by the SNB sellout and the lag of Australian retail banks behind their international rivals did not seem to shake the market…

[B]Aussie banks fail on service[/B] - Australian retail banks ranked 13th of the 17 countries surveyed by Booz Allen Hamilton, lagging behind many of their international rivals. The banks need to improve their customer interface in order to catch up. Source: Herald Sun,21985,21924449-5012062,00.html
[B]MacBank sells airport stake for $2bn[/B] - Macquarie Airports, global airport investor backed by the Australian Macquarie bank, is to sell its stake in Rome?s two major airports, worth close to $2 billion, as the venture did not appear to be very profitable. The cash proceeds are rumored to be invested into Auckland International Airport. The latter is an attractive buy not only to Macquarie, but to a Canadian pension company, so the price is likely to be quickly bid up. Source: Herald Sun,21985,21924725-5012062,00.html
[B]Swiss to sell 250t of gold[/B] - SNB proclaimed that selling 250 tones of gold and increasing foreign exchange reserves will decrease the risk of the overall bank assets. This unprecedented amount of gold is to be sold by September of the next year and according to a major investment bank represents 6% of annual demand for the precious metal. It is expected that this sell-off will put a strong downwards pressure on gold prices, which will have a strong effect on the economy of Australia, third largest supplier of gold to the world markets. Source: The Australian.,20867,21921439-5005200,00.html
Glenn Stevens was the primary mover of the Aussie today. He spoke in front of the parliament today, restating what he has delivered earlier: the inflationary pressures in 2008 are real, but the RBA has time to respond to them. This coupled with strong stock market performance, and a fall of the US bonds made investors more confident in the strength of the Australian currency, and boosted it to highs of .8442 against the US, compared to Friday?s .8363.

[U][B]Stock Market[/B][/U]
Booming oil and metal prices, as well as fall of bonds, boosted the stock market to head for the new highs. Rio Tinto set a benchmark record on the Australian exchange, being the first stock to reach A$100 - a three digit price. Investors find it logical that it was a mining company set a record benchmark on the ASX 200. The index gained 49.6 points climbing to 6343.4. While another mining giant, BHP did not set a stock market record, it hits the record for its own price rising by 1.7% to A$34.58. Macquarie Airports was also one of the winners: boosted by the news that it is selling its assets in Rome and streamline its cash into more profitable projects it gained 1.2%. We hope that ASX will catch on to the good momentum and will see a rise tomorrow as well.

[U][B]Bond Market[/B][/U]
Heavily correlated with the US bonds, the Australian 10-yr yield opened low and traded at about 6.230, but then regained its position a little and rose to 6.258.