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

 


IG Markets - Afternoon Thoughts


IG Markets - Afternoon Thoughts

FTSE 5785 -15
DAX 7315 -17
CAC 3485 -17
IBEX 7817 -47
DOW 12866 -12
NAS 2640 -1
S&P 1396 -3

Oil 87.17
Gold 1741

Asian markets have picked up on the negative tone from US trade and declined in a fairly subdued session. Although we are seeing weakness at the moment, it generally seems markets are in a holding pattern after some of the big moves we’ve seen recently. The fact that risk currencies have been largely unchanged in Asian trade is testimony to the fact that we are in a holding pattern. The euro lost ground against the greenback as European and US traders showed little enthusiasm for the Greek debt deal which was announced during yesterday’s Asian trading session. With the deal doing little more than ‘kicking the can down the road’, and already effectively priced in, trader attention quickly returned to the US fiscal cliff discussions which appeared to have resumed their hostile undertones. Democrat Senate majority leader Harry Reid said he was disappointed with the lack of progress made in relation to the debt talks, appearing frustrated at the Republican’s lack of flexibility on tax increases for the wealthiest 2% of Americans. Until this tax issue is resolved, it seems unlikely that other issues such as cuts to spending and entitlements will be discussed. The apparent lack of progress created a clear ‘risk off’ bias to trading which resulted in EUR/USD falling approximately 50 pips over the course of the European/US sessions to close out US trade at 1.2943, where it remains essentially unchanged in early Asian trade. Elsewhere, the pound also slid on the ‘risk off’ thematic, falling about 15 pips to close the US session at 1.6022.

Looking at the equities around the region, Japan’s Nikkei has finally lost its grip after having been bid higher in past sessions. The Nikkei has dropped 0.8%, mainly as a result of the pullback we are seeing in USD/JPY which is now below 82 at 81.83. Some traders feel USD/JPY may come under pressure should fiscal cliff concerns escalate and fuel a rush to the yen’s safety. Should this eventuate, the Nikkei would likely come under pressure and possibly present fresh opportunities for entries on a pullback into support. The rest of the region is also struggling with the ASX 200 down 0.4% and the Hang Seng retreating 0.7%. Ahead of the European open, we are calling the FTSE -15 at 5785, DAX -17 at 7315 and CAC -17 at 3485. After having managed modest gains yesterday, we expect to see European markets play a bit of catch-up to the losses experienced in other regions. There is nothing major on the UK economic calendar. However, in Europe we have German preliminary CPI which is expected to show a minor contraction (-0.1%) and European M3 money supply data. US markets are set to open mildly weaker with new home sales data and the beige book in focus. Following yesterday’s moves in US trade, it is clear that any comments by US leaders on the fiscal cliff will result in some volatility and that we are in a headline risk environment. Once all the noise is taken out, it certainly seems like the global economy is in a better place and we are likely to start seeing markets mount a recovery.

www.igmarkets.com

ends

© Scoop Media

 
 
 
 
 
Business Headlines | Sci-Tech Headlines

 

BusinessDesk: SkyCity Lifts Minimum Convention Centre Investment To $430M

SkyCity Entertainment Group, the casino operator, has lifted the minimum it will invest in the Auckland International Convention Centre to $430 million and said total costs including land may be $450 million to $470 million. More>>

Statistics: Drop In Dairy Prices Leads Fall In Exports

Total goods exports fell $240 million (5.5 percent) to $4.2 billion in April 2015 compared with April 2014, Statistics New Zealand said today. More>>

BusinessDesk: APN's NZME Sees Future In Paywalls, Growth In Digital Sales

APN News & Media has touted a single newsroom concept for its NZME unit in New Zealand, similar to what Germany's Die Welt uses, saying an 'integrated sales proposition' is helping it win market share, including ... More>>

Labour Party: Global Milk Prices Now Lowest In 6 Years

The latest fall in the global dairy price has brought it to the lowest level in six years and shows there must be meaningful action in tomorrow’s Budget to diversify the economy, says Labour’s Finance spokesperson Grant Robertson. “Dairy prices ... More>>

BusinessDesk: NZ Inflation Expectations Creep Higher In June Survey

May 19 (BusinessDesk) - New Zealand businesses lifted their expectations for inflation over the next two years, sapping any immediate pressure on the Reserve Bank to cut interest rates, and prompting the kiwi dollar to jump higher. More>>

BusinessDesk: Lower Fuel Costs Drive Down NZ Producer Input, Output Prices

May 19 - Producer input and output prices fell in the first quarter, mainly reflecting lower fuel costs and weakness in prices of meat and dairy products. More>>


Media: Fairfax Media NZ Announces Senior Editorial Team

Fairfax Media New Zealand has today confirmed its new editorial leadership team, as part of a transformation of its newsrooms aimed at enhancing local and national journalism across digital and print. More>>

Science: Flavonoids Reduce Cold And Cough Risk

Flavonoids reduce cold and cough risk Research from the University of Auckland shows eating flavonoids – found in green tea, apples, blueberries, cocoa, red wine and onions – can significantly reduce the risk of catching colds and coughs. The research, ... More>>

BusinessDesk: RBNZ House Alert Speech The Catalyst For Government Action

Prime Minister John Key all but conceded that pressure from the Reserve Bank of New Zealand for concerted action on rampant Auckland house prices was one of the main catalysts for the government's weekend announcements about tightly ... More>>

BusinessDesk: How To Fall Foul Of The New Housing Tax Rules: Tips From IRD

Just because you rented out your investment property doesn't absolve you from paying tax, says the Inland Revenue Department in a summary of commonly made mistakes by non-professional property investors when it comes to their tax liability.More>>

Legal: Superdiversity Law, Policy And Business Stocktake Announced

Mai Chen, Managing Partner at Chen Palmer New Zealand Public and Employment Law Specialists and Adjunct Professor of Law at the University of Auckland, today announced the establishment ... More>>

Housing: More House Price Gains Expected

House price expectations remain high, with a net 56% of respondents expecting house prices will increase. Fears of higher interest rates are fading, consistent with the RBNZ’s signals this year. Affordability and a lack of houses for ... More>>

Get More From Scoop

 
 
 
 
 
 
 
 
 
Business
Search Scoop  
 
 
Powered by Vodafone
NZ independent news