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

 


IG - Afternoon thoughts November 16, 2012

FTSE 5672 -6
DAX 7029 -14
CAC 3375 -7
IBEX 7682 -14
DOW 12538 -4
NAS 2523 -1
S&P 1352 -1

Oil 85.96
Gold 1713

Asian markets are mixed as some market participants remained cautious on the looming fiscal cliff. Clearly the fears around the fiscal cliff are hurting investor sentiment in the US and this in turn is having a flow on affect to Europe and parts of Asia. Certainly this is not the case in Japan, where the Nikkei is up 1.9% and 2.7% for the week. Today, Prime Minister Yoshihiko Noda should dissolve the lower house of parliament and call for a near-term election on December 16. This has been one of the most interesting dynamics this week, as the implications of the LDP party taking back power after a three-year absence has the market thinking we are going to see much more radical action; not just by pro-active fiscal action, but it may also (despite the BoJ claiming independence) influence monetary policy in a much more aggressive manner. The central bank currently has an inflation ‘goal’ of 1%, but LDP party leader Shinzo Abe is optimistically calling for a 2-3% target, which in turn opens it up for extremely radical measures. Whether it can meet this target is up for debate, especially when its economy seems to be getting worse by the day.

However, it seems the market feels another change at the helm, both at a government and central bank level, could bring about better fortunes for its economy and potentially through a lower JPY. It seems that if the LDP party lives up to the polls’ predications then it will have the chance to have a greater say in who replaces current BoJ chairman Masaaki Shirakawa when his term finishes in early April, and from there it can choose exactly how radical a banker it would like. What we really need from Japan is some consistency, given the constant change of personnel both at a central bank and government level, however if it really wants to weaken the JPY and help its ailing export sector then buying foreign bonds would be a real solution to creating sizeable outflows from the JPY. The current regime is unwilling to do this, but any signs a new leader at the BoJ is ready to go down this road then traders will look to buy USD/JPY, AUD/JPY and the Nikkei in spades. We will watch this space, not just for its trading opportunities, but also as a nice side story from all the negativity towards the US fiscal cliff!

Looking at the equities in the rest of the region, the Hang Seng is up 0.4%, the Shanghai Composite is down 0.9% while the ASX 200 is modestly lower. Ahead of the European open, we are calling the major bourses mildly weaker. After yesterday’s GDP numbers, the European current account and trade balance figures will be closely watched. As expected, the ASX 200 has had a very subdued morning session. The local market is currently down 0.2% at 4340, right near where it opened this morning. With no local economic data on the calendar, there were no fresh leads to sway market participants in either direction. The financial sector is the worst performer today, with ANZ Bank dropping 1.7% and Westpac falling 1.2%. However, National Australia Bank has bucked the trend and is currently up 0.6%. It has also been a tough session for the resources sectors, with materials and energy names heading lower. Fortescue Metals is down 2% and Woodside Petroleum has shed 0.7%. Seven West Media (+28% for the week) and Fairfax (+11% for the week) have had a stellar run this week after both companies announced plans to pay down debt. Once again, defensive names are ahead with gains for consumer staples, healthcare and telecoms. This shows how nervous investors are about piling into cyclical stocks.

www.igmarkets.com

ENDS

© Scoop Media

 
 
 
 
 
Business Headlines | Sci-Tech Headlines

 

Future Brighter Money: RBNZ Releases New Bank Note Designs

New Zealand’s banknotes are getting brighter and better, with the Reserve Bank today unveiling more vibrant and secure banknote designs which will progressively enter circulation later next year. More>>

ALSO:

Commerce: Supermarket Inquiry Finds No Breaches By Countdown

The Commerce Commission inquiry into anti-competitive behaviour by Countdown supermarkets, alleged by former Labour Party MP Shane Jones, has found nothing to warrant prosecution, although it warns supermarkets to take care in the way they communicate... More>>

ALSO:

Crown Accounts: English Flags ‘Challenge’ To Budget Surplus

Finance Minister Bill English is warning next month’s half yearly fiscal and economic update from the Treasury may not forecast a budget surplus, saying that returning the government’s accounts to surplus in 2015 will be “a challenge”, given the decline in commodity prices and weak global inflation. More>>

ALSO:

March 2015: Netflix To Launch In Australia And New Zealand

World’s Leading Internet Television Network to Offer Original Series, Movies, Documentaries, Stand-Up Comedy Specials and TV Shows for Low Monthly Price More>>

ALSO:

Price Of Cheese (Is Up): Dairy Product Prices Fall To Five-Year Low

Dairy product prices fell in the latest GlobalDairyTrade auction to the lowest level in more than five years, led by declines in rennet casein and skim milk powder. More>>

ALSO:

Gordon Campbell: On The Australians Scoring Trade Points Against Us With The Chinese

It hasn’t been a great year for Trade Minister Tim Groser... To top it off, Australia has just signed a FTA with China that has far better provisions on dairy exports than what New Zealand currently enjoys in our own FTA with China. More>>

ALSO:

Iwi & Local Consultation: Oil And Gas Block Offer 2015 Begins

Energy and Resources Minister Simon Bridges today announced the start of the Block Offer 2015 process for awarding oil and gas exploration permits. More>>

Industrial Action: Stats NZ Throwing Public Money Away Duplicating Data

The Public Service Association (PSA) says Statistics NZ are throwing money away by collecting the same data twice for official statistics such as the Consumer Price Index... As part of the ongoing industrial action, field interviewers who are PSA members are continuing to collect data, but are not sending it through to Statistics NZ. More>>

ALSO:

Other Stats:

Space: Rosetta's 'Philae' Makes Historic First Landing On A Comet

After more than a decade traveling through space, a robotic lander built by the European Space Agency has made the first-ever soft landing of a spacecraft on a comet. More>>

ALSO:

Get More From Scoop

 
 
Standards New Zealand

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