Video | Agriculture | Confidence | Economy | Energy | Employment | Finance | Media | Property | RBNZ | Science | SOEs | Tax | Technology | Telecoms | Tourism | Transport | Search

 


Risk assets continue to rally as US polling begins

11.46 NZST, Wednesday 7 November 2012


Risk assets continue to rally as US polling begins


By Andrew May (Sales Trader, CMC Markets New Zealand)

The gloves are off for most risk asset classes as we head to a nail biter of an election result of just who will win the US presidential running and ultimately the world’s strongest economy for another four years. In one corner Republican candidate Mitt Romney, who most say will effectively cease the present reform of money printing and avoidance of hefty tax increases. While in the other, current US President and Democratic rival Barrack Obama, who with the fiscal cliff vastly approaching, continues his pledge of job growth and keeping interest rates lower for longer.

Either way expect a tumultuous continuation of the rally we've witnessed over the last 4-5 days. The NZDUSD is hot on the heels of last night’s Reserve Bank of Australia rate decision to keep rates on hold at 3.25%, effectively opening itself up to further rate cuts, found itself eyeing US 83c briefly touching an overnight high of 0.8290. The cross pair has had its best rally since early September as investor sentiment underpinned a return to solid risk appetite of aggressive portfolios. Expect a firm entrenchment at 0.8270-75 with a view to a post-election resistance of 0.8320-50.

Commodities are also enjoying the jubilant run and stocks have jumped as voters head to the polls to cast their ballot. West Texas December crude shot up $2.82 or 3.26% to US $88.46 and Gold up a huge $32.10 or just under 2% to US $1715.30 oz. The Dow Jones, in late trade and defying usual Election Day performance closed up 133.24 points or 1.02% to 13,245.68. Not since the 2000 election of Al Gore vs George W. Bush have markets proved so strangely and dramatically optimistic.

All Kiwi cross pairs were additionally boosted locally in the overnight Fonterra milk price auction, up 1.6% since the previous auction. However most localised data due later this week (employment figures and retail card spending) will be overshadowed by an election result that is surely too close to call.
ends

© Scoop Media

 
 
 
 
 
Business Headlines | Sci-Tech Headlines

 

Not Enough Rain: Drought Impacts Business And Will Affect GDP

Businesses which rely on trade in parts of the country which are experiencing drought conditions are very concerned about the extreme weather. More>>

ALSO:

Housing: Affordability Drops 14%, Driven By Auckland Prices

Housing affordability across New Zealand fell 14 percent in the year ending November 2014, with Auckland’s lack of affordability set to reach levels it hit during the height of the global financial crisis, according to the latest Massey University Home Affordability Report More>>

ALSO:

The Dry: Fonterra Drops Forecast Milk Volumes By 3.3 Percent

Fonterra Cooperative Group, the worlds largest dairy exporter, reduced its milk volume forecast for the 2014-2015 season by 3.3 per cent due to the impact of dry weather on production in recent weeks. More>>

ALSO:

Strike: Lyttelton Port Workers Vote To Escalate Dispute

Members of the Rail and Maritime Transport Union (RMTU) at Lyttelton Port today voted to escalate their industrial action. Around 200 RMTU members have been operating an overtime ban since 17 December and today they endorsed a series of full withdrawals of labour at the port. More>>

ALSO:

Scoop Business: NZ Dollar Falls To 3-Year Low As Investors Favour Greenback

The New Zealand dollar fell to its lowest in more than three years as investors sold euro and bought US dollars, weakening other currencies against the greenback. More>>

ALSO:

Get More From Scoop

 
 
Standards New Zealand

Standards New Zealand
 
 
 
 
 
 
 
 
Business
Search Scoop  
 
 
Powered by Vodafone
NZ independent news