Dow down 104 having been down 200 at worst. Europe the main issue still. The Spanish market falls 3.58% and the Italian market down 2.71%. Spanish bond yields up 12bp to 7.621% and Italian bond yields up 26bp to 6.597%. The Italian market is at its lowest level since the euro was introduced.  There is talk of a full bailout needed for Spain. The Troika officials have arrived in Greece to assess their compliance with terms of the bailout — three EU officials undermine the process with comments that Greece will not be able to meet their obligations raising the prospect of a Greek exit from the euro.

Weak economic numbers in the US included the Richmond Fed manufacturing index. German PMI numbers disappointed — they saw the biggest drop in three years suggesting Germany is heading back into recession. Worst sectors: Basic Materials (-1.9%), Telecoms (-1.8%), Energy (-1.3%) and Industrials (-1.2%). Oil price up 14c, the first rise in three days as the situation in Syria worsened despite a rise in US crude inventories. Metals mixed — Copper and Nickel up 0.21% and 0.94% and zinc and aluminium down 1.05% and 0.73%. Apple down 5.1% after hours on late results. Apple is a major component of the US indices. A Wall St Journal article suggests QE3 is going to come earlier not later.

  • The CPI number for the June Q was up 0.5% (below the 0.6% expected) and the annual number is up 1.2% against forecasts of 1.3%. The trimmed mean is +2.0% down from 2.2%. The number leaves the RBA free to cut rates is they need to although the feeling is that there are currently more important factors than inflation driving the decision like global growth and European stability … but judging from the way they are going a rate cut is becoming more likely not less.
  • Macquarie (MQG) AGM — Guarded caution but guidance retained – Macquarie have had their AGM this morning. There have been concerns about a profit warning because the company is geared to weak low volume equity and financial markets. Despite that they have retained guidance and are cautiously optimistic. Main points: Q1 2012 is up on Q1 2011 (they have a March YE) but down on 4Q 2012. Costs down 10%. Confirm guidance for a better 2013 than 2012. MQG is down 1.4% to 2395c.
  • Atlas Iron (AGO 175c) June quarter production was up +25% on the previous quarter to 1.5mt. Total shipments 5.57mt for FY12 which is +21% on FY11. Cash operating costs were inline with guidance of $42-$45/t. AGO up 0.3% to 175c.
  • Alacer Gold (AQG 495c) have announced their June quarter production numbers including a +6% increase in gold production compared to the previous quarter. Q2 gold sales totaled 108,855 ounces. Their guidance for the FY12 remains at 435,000 to 500,000 ounces. AQG is up 7.88% to 534c.
  • Oz Minerals (OZL 753c) June quarter copper production was 25.5mt which was down -6.59% from the previous quarter. Gold production was down – 15.2% to 34.5mt on the previous quarter. OZL is down 1.5% to 741c.

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