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

 

Inequality: Top 10% Of Housholds Have Half Of Total Net Worth

The average New Zealand household was worth $289,000 in the year to June 2015, Statistics New Zealand said today. However wealth was not evenly distributed, with the top 10 percent accounting for around half of total wealth. In contrast, the bottom 40 percent held 3 percent of total wealth. More>>

ALSO:

What Winter? Temperature Records Set For June 20-22

The days around the winter soltice produced a number of notably warm tempertaures. More>>

Conservation Deal: New Kākāpō Recovery Partnership Welcomed

Conservation Minister Maggie Barry says the new kakapo recovery partnership between DOC and Meridian Energy is great news for efforts to save one of New Zealand’s most beloved birds. More>>

ALSO:

Tech Sector Report: Joyce Warns Asian Tech Investors View NZ As Hobbits And Food

Speaking in Wellington at the launch of a report showcasing the value of the technology sector to the New Zealand economy, Joyce said more had to be done to tell the country's technology stories overseas. More>>

ALSO:

Mediaglommeration: APN Gets OIO Approval For Demerger Plan

APN News & Media has received Overseas Investment Office approval for its plan to split out its NZME unit ahead of a potential merger with rival Fairfax Media's New Zealand operations. More>>

New Paper: Ninety-Day Trial Period Has No Impact On Firms' Hiring

The introduction of a 90-day trial period has had no impact on hiring by New Zealand companies although they are now in widespread use, according to researchers at Motu Economic and Public Policy Research. More>>

ALSO:

Corrections: Serco Exits Equity Stake, Remains As Operator

Serco has sold its equity stake in the company that holds the contract to design, build and run Wiri Prison in South Auckland but continues as sub-contractor to operate the facility. More>>

GDP: NZ Economy Grows Faster-Than-Forecast 0.7%

New Zealand's economy grew at a faster pace than expected in the first quarter of 2016 as construction expanded at the quickest rate in two years. The kiwi dollar jumped after the data was released. More>>

ALSO:

Get More From Scoop

 
 
 
 
 
 
 
 
 
Business
Search Scoop  
 
 
Powered by Vodafone
NZ independent news