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

 

Power Outages, Roads Close: Easter Storm Moving Down Country

The NZ Transport Agency says storm conditions at the start of the Easter break are making driving hazardous in Auckland and Northland and it advises people extreme care is needed on the regions’ state highways and roads... More>>

ALSO:

Houses (& Tobacco) Lead Inflation: CPI Up 0.3% In March Quarter

The consumers price index (CPI) rose 0.3 percent in the March 2014 quarter, Statistics New Zealand said today. Higher tobacco and housing prices were partly countered by seasonally cheaper international air fares, vegetables, and package holidays. More>>

ALSO:

Notoriously Reliable Predictions: Budget To Show Rise In Full-Time Income To 2018: English

This year’s Budget will forecast wage increases through to 2018 amounting to a $10,500 a year increase in average full time earnings over six years to $62,200 a year, says Finance Minister Bill English in a speech urging voters not to “put all of this at risk” by changing the government. More>>

ALSO:

Prices Up, Volume Down: March NZ House Sales Drop 10% As Loan Curbs Bite

New Zealand house sales dropped 10 percent in March from a year earlier as the Reserve Bank’s restrictions on low-equity mortgages continue to weigh on sales of cheaper property. More>>

ALSO:

Scoop Business: Chorus To Appeal Copper Pricing Judgment

Chorus will appeal a High Court ruling upholding the Commerce Commission’s determination setting the regulated prices on the telecommunications network operator’s copper lines. More>>

ALSO:

Earlier:

Cars: Precautionary Recalls Announced For Toyota Vehicles

Toyota advises that a number of its New Zealand vehicles are affected by a series of precautionary global recalls. Toyota New Zealand General Manager Customer Services Spencer Morris stressed that the recalls are precautionary. More>>

ALSO:

'Gardening Club': Air Freight Cartel Nets Almost $12 Million In Penalties

The High Court in Auckland has today ordered Swiss company Kuehne + Nagel International AG to pay a penalty of $3.1 million plus costs for breaches of the Commerce Act. Kuehne + Nagel’s penalty brings the total penalties ordered in this case to $11.95 million ... More>>

ALSO:

Crown Accounts: Revenue Below Projections

Core Crown tax revenue has increased by $1.9 billion (or 5.0%) compared to the same time last year. However this was $1.1 billion less than expected and is reflected across most tax types, continuing the pattern of recent months. More>>

ALSO:

Get More From Scoop

 
 
Computer Power Plus
 
 
 
 
 
 
 
 
Business
Search Scoop  
 
 
Powered by Vodafone
NZ independent news