Australia: Selloff seems ominous
15.06 AEDT, Tuesday 13 November 2012
Selloff seems ominous
By Ben Taylor (Sales Trader, CMC Markets)
The market started selling and just kept going today on the back of a deterioration of sentiment both locally and overseas. The selloff seems ominous and is far heftier than what we had estimated heading into today.
Europe’s ability to handle the Greek debt crisis and anticipating developments for the US fiscal cliff are causing the market to gyrate.
Australian business conditions hitting a three year low had investors bailing out of the Australian dollar and had them increasing their bets in the RBA cutting rates in December. A drop in wages, falls in employment and low inflation indicators had confidence remaining negative.
The market is bracing itself for US political deterioration and a potential departure of Greece from the Euro. Whilst the fiscal cliff is the big talking point the Republicans seem willing to concede on the deductions allowed by high income earners.
As European officials pushed the Greek budget through their parliament the world is waiting for Greece to be granted its next tranche of bailout funds. The IMF has however spoilt the party demanding Greek bondholders take another cut on their holdings to allow Greece to mend from its debt affliction.