Markets up on ECB bond purchase program rally

It looks like the ECB are going to announce an unlimited bond purchase program of "sterilised" bonds but only for countries that have asked for a bailout and only if they adhere to conditions.

The market is up 47. SFE Futures were up 12 this morning.

The Dow was up 60 at best and down 17 at worst. The Dow traded at its highs early in the day as a Bloomberg TV report “leaked” details of tonight’s ECB meeting. It looks like the ECB are going to announce an unlimited bond purchase program of “sterilised” bonds but only for countries that have asked for a bailout and only if they adhere to conditions. It will reportedly go under the name of “Monetary Outright Transactions” and is structured to avoid accusations that the ECB are printing money. The bonds acquired will have short-dated maturities (1 to 3 years). The ECB is not expected to publicly impose a cap on yields.

The rally was short-lived as ECB officials declined to comment, and reports out of Germany suggested Chancellor Angela Merkel would only support the program in the near term. With US employment figures and the highly anticipated ECB and Bank of England meetings tomorrow global markets were again lightly traded.

Spanish 10 year bond yield down 16.1bpts to 6.40%. Italian 10 year bond yield down 15.4bpts to 5.51%. European markets mixed — UK FTSE down 0.25%, Germen DAX up 0.46%, France up 0.20%, Spain up 0.08%, Italy down 0.62% and Greece up 3.57%.

Metals up — Copper up 1.31%, Nickel up 0.94%, Aluminium up 1.87% and Zinc up 0.74%. A$ is at 101.90c — a two month low.

Unemployment rate fell to 5.1% in August down from 5.2%. Economists were expecting a rise to 5.3%.
Aussie dollar up on the employment news.
Billabong International (BBG) received a second takeover offer from an unnamed third party valuing the company at $694.5m or 145c per share. The non-binding cash offer is the same price offered by TPG in July. BBG is up 10c to 137c.
Lynas Corp (LYC) have received a licence to operate the LAMP refinery in Malaysia and plan to have the finished product shipped before the end of this year. This is a major win for the company who have fought a long battle with the Malaysian government to gain approval. LYC hit a high of 95c but has come back down to 77c up 31%.
Qantas Airways (QAN) and Emirates have formed an alliance that will see the airlines replace Singapore with Dubai as the stopover to London. This deal is more important to Qantas than a code share agreement as it allows co-operation on flight scheduling, ticket pricing and joint selling of tickets between Australian and Dubai. QAN up 4.4%.
Fortescue Metals Group (FMG) — is under pressure to raise equity to boost their balance sheet even though they have delayed part of their US$9bn expansion plan which will conserve cash. FMG has US$750m in debt maturing December 2013 and US$600m maturing June 2014. One of the joint Company Secretaries has resigned. Price down another 8.3%.
BHP Billiton (BHP) — Petroleum boss Mike Yeager says US gas prices need to go up another 20% before the company will start drilling dry gas areas in their shale gas assets.

For a five day FREE TRIAL of the MARCUS TODAY newsletter Click Here. You will receive our renowned and popular Daily email about the stockmarket with all the stuff you need to know ahead of the trading day including:

Overnight developments, news, comments, rumours, broker recommendations and ideas from Marcus and his Team.
Our Portfolio recommendations which is actively managed on behalf of subscribers … no “set & forget”. Everything you need to effortlessly
managed your own long term investment portfolio.
Daily Technical Trading ideas and data, including daily scans of the ASX 300 for stocks changing trend.
Stock Database — all the numbers with comments on the top 300 stocks and more.
Educational section — Marcus’s Educational and Entertaining articles.