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

 


IG - afternoon thoughts and European opening calls 4/12/12

Heading into today‘s session we had been predicting the ASX 200 to open modestly weaker, with the benchmark index called down 7 points or 0.15% at 4524. As things currently stand, the market is 10 points or 0.2% lower at 4521, with most sector indices marginally in the red. While a softer open was always on the cards this morning based on US leads, most of the day’s action was expected to have come this afternoon after the RBA rates decision. However, in cutting rates by 25 basis points as was widely predicted, the market’s reaction has been absolutely minimal, with the ASX 200 remaining essentially unchanged. Based on a string of recent weak data points, such as capex spending, job ads, retail sales and building approvals, a multitude of international uncertainties spanning Europe, China and the US and a stubbornly high AUD, it seemed the RBA felt compelled to act with additional easing measures. Yesterday’s flat October retail sales print (against estimates of 0.4% growth) would appear as confirmation that retailers, despite the string of rate cuts in recent months, are yet to see any material improvement in consumer spending. The Christmas shopping season is a crucial period for all retailers, where some make more than 40% of their annual profits, so a buoyant consumer is critical to their bottom-line performance. Shares of the big department stores as well as the likes of discretionary retailers such as Harvey Norman and JB Hi-Fi are mixed after today’s decision. Turning to the European session, yesterday we saw European equities finish marginally higher and the euro modestly firmer against the dollar, with advances driven by a fall in peripheral European debt yields, brought about by Greece announcing details of its debt buyback program. The debt buyback, by way of a Dutch auction, is a key component in the efforts of lenders to put Greece’s debt levels back on sustainable footing and will enable the indebted nation to receive crucial bailout funding to allow it to stave off bankruptcy. While not a definitive solution, any form of debt forgiveness will ease the burden on Greece’s finances and help to ensure it does not have to keep returning to the international lending community for bailout funding. This positive development was offset by a weaker-than-expected US manufacturing PMI print (49.5 versus 51.3 consensus), ensuring gains across European equities and the euro itself were marginal at best. On today’s economic calendar we have Spanish unemployment, European PPI and UK construction PMI to look forward to; however, as is now the norm, headlines surrounding the fiscal cliff are likely to be the major influences of market sentiment. Ahead of the European open we’re calling the FTSE -14 at 5857, the DAX -23 at 7412 and the CAC -7 at 3559.

ENDS

www.igmarkets.com

© Scoop Media

 
 
 
 
 
Business Headlines | Sci-Tech Headlines

 

Tourism: China Southern Airlines To Fly To Christchurch

China Southern Airlines, in partnership with Christchurch Airport and the South Island tourism industry, has announced today it will begin flying directly between Guangzhou, Mainland China and the South Island. More>>

ALSO:

Dodgy: Truck Shops Come Under Scrutiny

Mobile traders, or truck shops, target poorer communities, particularly in Auckland, with non-compliant contracts, steep prices and often lower-quality goods than can be bought at ordinary shops, a Commerce Commission investigation has found. More>>

ALSO:

Auckland Transport: Government, Council Agree On Funding Approach

The government and Auckland Council have reached a detente over transport funding, establishing a one-year, collaborative timetable for decisions on funding for the city's transport infrastructure growth in the next 30 years after the government refused to fund the $2 billion of short and medium-term plans outlined in Auckland's draft Unitary Plan. More>>

ALSO:

Bullish On China Shock: Slumping Equities, Commodities May Continue, But Not A GFC

The biggest selloff in stock markets in at least four years, slumping commodity prices and a surge in Wall Street's fear gauge don't mean the world economy is heading for another global financial crisis, fund managers say. More>>

ALSO:

Real Estate: Investors Driving Up Auckland Housing Risk - RBNZ

The growing presence of investors in Auckland's property market is increasing the risks, and is likely to both amplify the housing cycle and worsen the potential damage from a downturn both to the financial system and the broader economy, said Reserve Bank deputy governor Grant Spencer. More>>

ALSO:

Annual Record: Overseas Visitors Hit 3 Million Milestone

Visitor arrivals to New Zealand surpassed 3 million for the first time in the July 2015 year, Statistics New Zealand said today. The record-breaking 3,002,982 visitors this year was 7 percent higher than the July 2014 year. More>>

ALSO:

Get More From Scoop

 
 
 
 
 
 
 
 
 
Business
Search Scoop  
 
 
Powered by Vodafone
NZ independent news