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Traders not compelled to take on risk


Traders not compelled to take on risk


By Tim Waterer (Senior Trader, CMC Markets)


Traders are not exactly feeling compelled to take on board risk at the moment given the ominous repercussions of a Fiscal Cliff scenario actually coming to fruition, even though the prevailing hope is that a deal will get done on some shape or form to prevent calamity. Though if history is any guide then this could well be a drawn out process with a conclusion perhaps not reached until the 11th hour. In other words, investors are likely to remain on tenterhooks for some time yet.

While the US Fiscal Cliff discussion is keeping positive sentiment in check, healthier Chinese economic indicators of late have provided a pocket of optimism for investors. Chinese economic health is a prerequisite for global markets to prosper. Whilst the current preoccupation with the Fiscal Cliff is having a stagnating affect on the market, signs of a turnaround in the Chinese economy is not going unnoticed.

The Australian sharemarket was very slow getting out of the blocks today with the ASX200 performance being dreary at best. Investors remain consumed by US Fiscal Cliff consequences, and this is capping market enthusiasm with such a significant obstacle remaining in the path of financial markets. While the ASX200 did recover from the session lows, it did look for the most part that traders were just biding time awaiting further news on the Fiscal Cliff front.

ends

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