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

 


Republican non-vote throws spanner in the works

Friday 21 December 2012

Republican non-vote throws spanner in the works.

By Tim Waterer (Senior Trader, CMC Markets)

Trading had been going along swimmingly during Asian markets hours until news of the Republican –non vote threw a spanner in the works, which saw risk assets quickly reverse course. But even if Republicans agreed to this plan, the Democrats had already flagged that they wouldn’t, so the net effect on the eventual cliff outcome is debatable. What is not debatable is the immediate deflating affect on financial markets courtesy of this latest news.

There are many moving parts to the ongoing fiscal cliff discussions which makes it difficult for investors to project whether financial markets will be adopting a pro-risk or anti-risk sentiment at the commencement of 2013. The lively move higher by financial markets in recent weeks when compared to the snail-paced discussion progress would indicate that a heavy dose of holiday season optimism has been indeed permeating the market. The only problem with this is that it leaves the door open for a significant fall should a non-market appeasing outcome occur in Washington.

The Aussie Dollar was on the slide today when news of the Republican non-vote on tax plan B hit the wires. The AUDUSD was already sitting below 1.05 due to another steep fall in the gold price which impacted the commodity-linked AUD. The Aussie slipped around a third of a cent (from 1.0470 to 1.0440) as higher yielding currencies gave up ground to the safe haven US Dollar with the latest set-back on the ‘cliff’ talks. How US markets take this latest news tonight will impact whether the AUD is closer to 1.04 or 1.05 heading to the weekend.

Despite an up-beat start to the day, the Australian sharemarket performed a u-turn following with the news out of Washington with sentiment dampened. The slump in US futures was a trend following by the major Asian bourses, with traders unwinding long positions as fiscal cliff fears were ramped up. With an apparent obstacle coming this close to the deadline, investor anxiety naturally heightened today and this was reflective in the performance of the ASX200. The rosier looking morning sentiment had taken a more solemn tone by the afternoon, with traders pulling in the reins on a market advance given the stagnated US budget talks.
ends

© Scoop Media

 
 
 
 
 
Business Headlines | Sci-Tech Headlines

 

Fruitful Endeavours: Kiwifruit Exports Reach Record Levels

In June 2016, kiwifruit exports rose $105 million (47 percent) from June 2015 to reach $331 million, Statistics New Zealand said today. Overall, goods exports rose $109 million (2.6 percent) in June 2016 (to $4.3 billion). More>>

ALSO:

Economic Update: RBNZ Says Rate Cut Seems Likely

The Reserve Bank will likely cut interest rates further as a persistently strong kiwi dollar makes it difficult for the bank to meet its inflation target, it said. The local currency fell. More>>

ALSO:

House Price Action Plan: RBNZ Signals National Lending Restrictions

The central bank wants to cap bank lending to property investors with a deposit of less than 40 percent at 5 percent and restore the 10 percent limit for owner-occupiers wanting to take out a mortgage with a deposit of less than 20 percent, according to a consultation paper released today. More>>

ALSO:

Sparks Fly: Gordon Campbell On China Steel Dumping Allegations

No doubt, officials on the China desk at MFAT have prided themselves on fashioning a niche position for New Zealand right in between the US and China – and leveraging off both of them! Well, as the Aussies would say, of MFAT: tell ‘em they’re dreaming. More>>

ALSO:

Loan Sharks: Finance Companies Found Guilty Of Breaching Fair Trading Act

Finance companies Budget Loans and Evolution Finance, run by former 1980s corporate high-flyer Allan Hawkins, have been found guilty of 106 charges of breaching the Fair Trading Act for misleading 21 borrowers while enforcing loan contracts. More>>

ALSO:

Post Panama Papers: Govt To Adopt Shewan's Foreign Trust Recommendations

The government will adopt all of the recommendations from former PwC chairman John Shewan to increase disclosure and introduce a register for foreign trusts with new legislation to be introduced next month. More>>

ALSO:

Get More From Scoop

 
 
 
 
 
 
 
 
 
Business
Search Scoop  
 
 
Powered by Vodafone
NZ independent news