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

 


IG Markets- Afternoon Thoughts 3 January 2013

IG Markets- Afternoon Thoughts 3 January 2013


FTSE 6038 +11
DAX 7773 -6
CAC 3723 -11
IBEX 8393 -55
DOW 13370 -43
NAS 2740 -7
S&P 1459 -3

Oil 92.70
Gold 1687

Regional equities are seeing a continuation of the buoyant risk environment in Asia today as investors react to the passing of the fiscal cliff deal. Although some analysts feel this is merely a relief rally as US leaders kick the can down the road so to speak, it seems to have done the job for now. The rally, which began in the afternoon part of Asian trade yesterday, extended through the European and US session. European and Asian markets rallied in anticipation of the bill being passed despite having encountered some uncertainty early in Asia. On the economic front, there was also a report showing manufacturing in the US expanded in December. The ISM manufacturing PMI climbed to 50.7 (from 49.5 a month earlier). Risk currencies mostly rallied in response to the fiscal cliff being averted, but have since shown signs of running out of steam. AUD/USD was one of the standouts as it jumped to a high of 1.0524, but has since retreated into the 1.049 region. USD/JPY remains steady above 87 where it seems to be forming a base. However, EUR/USD gave up significant ground from its Asian session highs. The pair fell sharply from a high of 1.33 and dropped all the way down to 1.316 where it is currently.

Some attributed the euro’s weakness to a disappointing eurozone manufacturing PMI reading which was revised down to 46.1 (from 46.3). All PMIs released from Europe showed that the economy is still far from getting back into growth/expansionary territory and this basically confirms some of the comments made by German Chancellor Angela Merkel earlier in the week. Others just attributed the move in the euro to some profit taking after it hit the 1.33 resistance. Traders will now be looking forward to another data dump from Europe today with Spanish and German unemployment change on the calendar. Although equities in the Asian region are generally firmer, price action in the risk currencies indicates that sentiment is subdued and the euphoria from the fiscal cliff deal has waned. With the Nikkei and Shanghai Composite closed, activity is limited in Asian trade. The Hang Seng has only managed a 0.3% gain, while the ASX 200 has climbed 0.5%. Without fresh leads to fan risk higher, we are likely to see profit taking kick in as market participants focus on some of the issues ahead like the debt ceiling, and lock in the significant gains from the past few weeks. Ahead of the European open, we are calling the major bourses weaker. US markets are also likely to shed some of yesterday’s hefty gains at the open. It will also be a big one for the US dollar with non-farm payrolls, unemployment claims and the FOMC meeting minutes all on the calendar.

The ASX 200 has advanced 0.5% and is currently trading at 4733 after having printed a fresh 19-month high of 4737.1. Once again the resource names are leading the charge with Rio Tinto rising 1.4% and Fortescue Metals climbing 1.8%. FMG continues to impress as it passed through $5.00 for the first time since July 2012 and has climbed 33% in four weeks on the back of news it will complete the Kings Development Project; FMG is currently trading at $5.02. The financial sector was one of the best performers in the US which has led to gains for banking stocks on the Australian market. CBA is the most notable stock, reaching its highest recorded level of $63.19 while ANZ is also following CBA’s lead up 0.3% to $25.27, its firmest level in six weeks. The defensive sectors are lagging with healthcare, consumer staples and utilities losing ground.

STAN SHAMU
Market Strategist

© Scoop Media

 
 
 
 
 
Business Headlines | Sci-Tech Headlines

 

Scoop Business: RBNZ Keeps OCR At 3.5%, Signals Slower Pace Of Future Hikes

Reserve Bank governor Graeme Wheeler kept the official cash rate at 3.5 percent and signalled he won’t be as aggressive with future rate hikes as previously thought as inflation remains tamer than expected. The kiwi dollar fell to a seven-month low. More>>

ALSO:

Weather: Dry Spells Take Hold In South Island

Many areas in the South Island are tracking towards record dry spells as relatively warm, dry weather that began in mid-August continues... for some South Island places, the current period of fine weather is quite rare. More>>

ALSO:

Scoop Business: Productivity Commission To Look At Housing Land Supply

The Productivity Commission is to expand on its housing affordability report with an investigation into improving land supply and development capacity, particularly in areas with strong population growth. More>>

ALSO:

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:

Get More From Scoop

 
 
Computer Power Plus

Standards New Zealand

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