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

 


Rally Leaves Market Vulnerable To Big Data Week

10.17 AEDT, Monday 3 December 2012

Rally Leaves Market Vulnerable To Big Data Week
By Ric Spooner (Chief Market Analyst, CMC Markets)

The Australian market heads into a new month and a big data week more vulnerable to bad news after rallying 4% from its mid-November low.

Early trade this morning is likely to see the market relatively firm on Friday’s closing levels. The weekend’s announcement of a 50.6 reading for China’s manufacturing PMI should set a firm tone for our market. Although this figure is a little below consensus expectations, it’s consistent with the run of recent data pointing to a recovery in China’s GDP growth.

This morning’s retail sales figure probably won’t change thinking much on tomorrow’s RBA decision. With consumer confidence improving and the impact of previous rate cuts flowing through, the general expectation is for moderate growth in retail sales. If this turns out to be the case it will reinforce a scenario where tomorrow’s rate cut decision will be fairly line ball. If the bank does cut rates it’s likely to be based more on its view of the prospective impact of lower mining investment and tighter government fiscal settings than on any signs of a deterioration in current economic conditions.

Like many other risk markets, the Australian share market has staged a decent rally over the past couple of weeks. This reflects an emerging view that the Fiscal Cliff negotiations in the US are more likely than not to produce a reasonable outcome that avoids pushing the economy back into recession. Even so it’s inevitable that government debt reduction will be a significant drag on the world’s largest economy in coming years. This is likely to prevent GDP growth being much better than about 2.5% even under a relatively optimistic scenario. This together with the risk of fiscal cliff negotiations running into trouble may put a cap on the current share market rally in the near future.

From a technical point of view the recent rally in the ASX 200 may yet prove to be only a correction against a larger decline. At this stage the market would need to take out the October peak at 4582, to provide greater certainty that the medium term rally off the June lows has resumed. There is short term support for the index around the 50 day moving average at 4454. This may hold the market at the moment in the absence of a significant change of sentiment.

CMC Markets Asia Pacific
Web: http://www.cmcmarkets.com/


ENDS

© Scoop Media

 
 
 
 
 
Business Headlines | Sci-Tech Headlines

 

Scoop Business: Alex Swney Pleads Guilty To $2.5M Fraud Charge

Alex Swney, former chief executive of the Auckland city centre business association Heart of the City, has pleaded guilty to dishonestly using documents to obtain $2.5 million. More>>

ALSO:

Petrol Burns Prices: Second Consecutive Quarterly Fall For CPI

The consumers price index (CPI) fell 0.3 percent in the March 2015 quarter, following a 0.2 percent fall in the December 2014 quarter, Statistics New Zealand said today. The last time the CPI showed two consecutive quarterly falls was in the December 1998 and March 1999 quarters. More>>

ALSO:

Scoop Business: NZ Broadcasters Launch Battle Against Global Mode ISPs

New Zealand broadcasters have confirmed they’ve launched legal proceedings against internet service providers who give customers’ access to “global mode”, which allows customers access to offshore online content, claiming it breaches the local content providers’ copyright. More>>

ALSO:

Sanford: Closure Of Christchurch Mussel Processing Plant Confirmed

The decision comes after a period of consultation with the 232 staff employed at the Riccarton site, who were told on 9 April that Sanford was considering the future of mussel processing in Christchurch. Recent weather patterns had impacted on natural spat (offspring) supply... More>>

ALSO:

Price Of Cheese: Dairy Product Prices Fall To The Lowest This Year

Dairy product prices fell in the latest GlobalDairyTrade auction, hitting the lowest level in the 2015 auctions so far, as prices for milk powder and butter slid amid concern about the outlook for commodities. More>>

ALSO:

Houston, We Have An Air Route: Air New Zealand To Fly Direct To The Heart Of Texas

Air New Zealand will fly its completely refitted Boeing 777-200 aircraft between Auckland and Houston up to five times a week opening up the state of Texas as well as popular nearby tourist states such as Louisiana and Florida. More>>

ALSO:

Scoop Business: Reserve Bank’s Spencer Calls On Govt To Rethink Housing Tax

The Reserve Bank has urged the government to take another look at a capital gains tax on investment in housing, allow increased high-density development and cut red tape for planning consents to address an over-heated Auckland property market. More>>

ALSO:

Get More From Scoop

 
 
 
 
 
 
 
 
 
Business
Search Scoop  
 
 
Powered by Vodafone
NZ independent news