Morning report (21.6.04)

The strength of the currency dominated the trading of the Top 40 shares on Friday, which closed slightly lower despite banks and retail stocks making large gains.

Nico Kelder, economist at the Effieicnet Group, reports that the currency hammered all the majors gaining around 2-percent. The dollar lost some ground (0.8%) against both the euro and yen.

Bond yields traded lower on the back of the stronger currency, which is a result of expectations that inflation should remain under control. Both gold and platinum jumped at the chance of polishing their price as the dollar weakened, oil closed flat – good news all round.

European and US markets traded flat on Friday in the absence of new news. Far Eastern markets are mixed with the Hang Seng (Hong Kong) trading slightly lower while the Nikkei (Japan) is romping higher so far this morning.

We expect that the markets should remain flat ahead of the inflation news due out this week.