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

 

Half Empty: Fonterra's 2017 Opening Forecast Below Expectations

Fonterra Cooperative Group raised its forecast farmgate milk payout for next season by less than expected as the world's largest dairy exporter predicts lower prices will crimp production and supply will pick up. The New Zealand dollar fell. More>>

ALSO:

Pest Control: Mouse Blitz Team Leaves For Antipodes

The Million Dollar Mouse project to rid Antipodes Island of mice is underway with the departure of a rodent eradication team to the remote nature reserve and World Heritage Area. More>>

Gongs Got: Canon Media Awards & NZ Radio Awards Happen

Radio NZ: RNZ website The Wireless, which is co-funded by NZ On Air, was named best website, while Toby Manhire and Toby Morris won the best opinion general writing section for their weekly column on rnz.co.nz and Tess McClure won the best junior feature writer section. More>>

ALSO:

Pre-Budget: Debt Focus Risks Losing Opportunity To Stoke Economy

The Treasury is likely to upgrade its forecasts for economic growth in Budget 2016 next week but Finance Minister Bill English has already signalled that more of his focus is on debt repayment than on fiscal stimulus or tax cuts... More>>

ALSO:

Fulton Hogan's Heroes: Managing Director Nick Miller Resigns

Fulton Hogan managing director Nick Miller will leave the privately owned construction company after seven years in charge. The Dunedin-based company has kicked off a search for a replacement, and Miller will stay on at the helm until March next year, or until a successor has been appointed and a transition period completed. More>>

ALSO:

Gordon Campbell: On Electricity, Executions, And Bob Dylan

The Electricity Authority has unveiled the final version of its pricing plan for electricity transmission. This will change the way transmission prices (which comprise about 10% of the average power bill) are computed, and will add hundreds of dollars a year to power bills for many ordinary consumers. More>>

ALSO:

Half Empty: Fonterra NZ, Australia Milk Collection Drops In Season

Fonterra Cooperative Group says milk collection is down in New Zealand and Australia, its two largest markets, in the first 11 months of the season during a period of weak dairy prices. More>>

ALSO:

Get More From Scoop

 
 
 
 
 
 
 
 
 
Business
Search Scoop  
 
 
Powered by Vodafone
NZ independent news