Weekly Market Commodity Report week commencing 26th Sept

Click Here for Market Commentry and economic round up for the week beginning 26th Sept 2011. A service supplied by Rural Bank

The latest RBA Financial Stability Review was released last Friday and it highlighted the strength of the Australian financial system and the broader economy.  In light of the panic in global financial markets, this was a welcome reminder that the Australian financial system and domestic economy are well placed to deal with any issues that arise from the current financial market volatility in the US and Europe.

In fact the RBA states that “the Australian banking system is considerably better placed to cope with periods of market strain than it was before the 2008 crisis”, with Australian banks viewed favourably by the international credit rating agencies.   Australian banks have little direct exposure to the risky Euro-zone sovereigns and absolutely no direct exposure to Greek sovereign risk. Also, Australian bank’s exposures to European banks are low, accounting for only 10.5% of their total foreign claims and 1.8% of their total assets.

Apart from this piece of upbeat news locally, you are probably aware that all the rest of the news last week was from offshore and all negative. The Dow however managed to close up 37 points last Friday night but the weekly loss on Wall Street was -6.4%, the largest since October 2008. This week is expected to open with a further degree of caution.