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

 

Forestry: Man Charged After 2013 Death

Levin Police have arrested and charged a man with manslaughter in relation to the death of Lincoln Kidd who was killed during a tree felling operation on 19 December 2013. More>>

ALSO:

Smells Like Justice: Dairy Company Fined Over Odour

Dairy company fined over odour Dairy supply company Open Country Dairy Limited has been convicted and fined more than $35,000 for discharging objectionable odour from its Waharoa factory at the time of last year’s ”spring flush” when milk supply was high. More>>

Scoop Business: Dairy Product Prices Decline To Lowest Since July 2012

Dairy product prices dropped to the lowest level since July 2012 in the latest GlobalDairyTrade auction, led by a slump in rennet casein and butter milk powder. More>>

ALSO:

SOE Results: TVNZ Lifts Annual Profit 25% On Flat Ad Revenue, Quits Igloo

Television New Zealand, the state-owned broadcaster, lifted annual profit 25 percent, ahead of forecast and despite a dip in advertising revenue, while quitting its stake in the pay-TV Igloo joint venture with Sky Network Television. More>>

ALSO:

Insurers Up For More Payouts: Chch Property Investor Wins Policy Appeal In Supreme Court

Ridgecrest NZ, a property investor, has won an appeal in the Supreme Court over insurance cover provided by IAG New Zealand for a Christchurch building damaged in four successive earthquakes. More>>

ALSO:

Other Cases:

Royal Society: Review Finds Community Water Fluoridation Safe And Effective

A review of the scientific evidence for and against the efficacy and safety of fluoridation of public water supplies has found that the levels of fluoridation used in New Zealand create no health risks and provide protection against tooth decay. More>>

ALSO:

Scoop Business: Croxley Calls Time On NZ Production In Face Of Cheap Imports

Croxley Stationery, whose stationery brands include Olympic, Warwick and Collins, plans to cease manufacturing in New Zealand because it has struggled to compete with lower-cost imports in a market where the printed word is giving way to electronic communications. More>>

ALSO:

Prefu Roundup: Forecasts Revised, Surplus Intact

The National government heads into the election with its Budget surplus target broadly intact, delivering a set of economic and fiscal forecasts marginally revised from May to reflect weaker commodity prices and a lower tax take. More>>

ALSO:

Get More From Scoop

 
 
Computer Power Plus

Standards New Zealand

Standards New Zealand
 
 
 
 
 
 
 
 
Business
Search Scoop  
 
 
Powered by Vodafone
NZ independent news