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

 


IG Markets - Afternoon Thoughts


IG Markets - Afternoon Thoughts

The S&P 500 is knocking on the 1500 door and solid earnings from Google and IBM have kept futures elevated through Asian trade. Apple and McDonalds have hogged the limelight today with the market expecting the former to achieve Q1 EPS of $13.52, Q1 revenue of $54.83 billion and gross margins of 38.6%. Apple is at a pivotal juncture, and the market, after pushing the stock down 18% since the Q4 results, is looking for evidence of a trough in earnings and the confidence needed to see a change in fortunes. Those who have been buying ahead of earnings should be appeased that history is on their side and the tech giant has beaten top-line expectations in six out of the last eight quarters.

Asia has once again dragged on European calls, although we haven’t really seen an overwhelming response from clients to short indices today. Japan is once again the standout as traders continue to sense that the rise in USD/JPY has hit a ceiling and inflows back into the JPY (at least in the short term) are a distinct possibility. The half-hearted response by the BoJ looked at first blush to have done enough, but it seems the market now feels the actions are no way urgent enough to rise up to the task at hand. Clearly, with the conservative-natured Mr Shirakawa at the helm, the aggressive policies that are sought by Shinzo Abe and needed to even dream of achieving 2% inflation are not going to materialise. With Mr Shirakawa stepping down in early April, a rally into the change of leadership in USD/JPY and the JPY crosses should unfold given the candidates pencilled in are keen promoters of Abe’s more radical measures. The market is watching government and central bank rhetoric on Japan’s contribution towards an all-out currency war; this will be when the war of words really heats up.

Australia has once again held a firm line despite its tendency to follow its second biggest trading partner in Japan. A below-consensus Q4 CPI (trimmed mean running at 2.4% year-on-year) has kept the interest rate cut hopefuls happy, although we would not read into this too much. At the most this removes inflation as a hurdle to cut rates further, but a lot now falls on domestic data, like employment, to give the bank the ammunition needed. The modest falls in AUD/USD to 1.0527 suggests the market agrees with us. BHP has also shown that Australia’s biggest company is tracking as expected and executing as planned. The numbers today pleased the market and while most divisions threw up few surprises relative to expectations, there were some positive themes if you drill down. The copper division looks interesting , and while the metal makes up around 15% of net asset value, it has made a real effort to highlight the growth in this space. Given the metals fundamentals (with positive supply/demand balance and a growing US housing market), growth here should appease investors.

European markets look set to open on the front foot with the FTSE likely making a new higher high and continuing the uptrend. While many are bearish on the prospects for sterling, especially given the potential for the BOE to link monetary policy to a GDP target under the upcoming Carney leadership, sterling’s loss is potentially the UK market’s gain. We feel that after underperforming in 2012, this index may see better days on a relative basis. Today’s employment data and BOE meeting minutes could hold some future clues on policy ahead of the GDP report, which, according to Mervyn King will be much weaker than Q3. Eurozone consumer confidence will also be in focus and for currency traders the Bank of Canada meeting could throw up some volatility. Expect inflation forecasts to be cut, although we would look more closely at its tightening language. The IMF will also release updates to its world economic outlook.

www.igmarkets.com

ends

© Scoop Media

 
 
 
 
 
Business Headlines | Sci-Tech Headlines

 

Keep Digging: Seabed Ironsands Miner TransTasman Tries Again

The first company to attempt to gain a resource consent to mine ironsands from the ocean floor in New Zealand's Exclusive Economic Zone has lodged a new application containing fresh scientific and other evidence it hopes will persuade regulators after their initial application was turned down in 2014. More>>

Wool Pulled: Duvets Sold As ‘Premium Alpaca’ Mostly Sheep’s Wool

Rotorua business Budge Collection Limited (Budge) and sole director, Sun Dong Kim, were convicted and fined a total of $71,250 in Auckland District Court after each pleading guilty to four charges of misrepresenting how much alpaca fibre was in their duvets. More>>

Reserve Bank: Labour Calls For Monetary Policy To Expand Goals

Labour's comments follow a speech today by RBNZ governor Graeme Wheeler in which Wheeler sought to answer critics who variously say he should stop lowering interest rates, lower them faster, or that inflation-targeting should no longer be the primary goal of the central bank's activities. More>>

ALSO:

BSA Extension And Sunday Morning Ads: Digital Convergence Bill Captures Online Content

Broadcasting Minister Amy Adams has today announced the Government’s plans to update the Broadcasting Act to better reflect today’s converged market... The Government considered four areas as part of its review into content regulation: classification requirements, advertising restrictions, election programming and contestable funding. More>>

ALSO:

March 2017: Commerce Commission Delays Decision On Fairfax-NZME

The Commerce Commission has delayed its decision on the proposed merger between NZME and Fairfax Media's New Zealand assets, saying the deal is complex and it needs more time to assess the impact on both news content and the advertising market. More>>

ALSO:

Plan Plan: Permanent Independent Hearings Panel Proposed For Planning

The Productivity Commission recommends creating a permanent independent hearings panel like the one that cut through local politics to settle Auckland’s Unitary Plan, for the whole country. More>>

ALSO:

Statistics: NZ Jobless Rate Falls To 5.1% Under New Methodology

New Zealand's unemployment rate fell more than expected in the second quarter as Statistics New Zealand adopted a new way of measuring the labour market to bring the country in line with international practices, and while a growing economy continued to support jobs growth. More>>

ALSO:

Get More From Scoop

 
 
 
 
 
 
 
 
 
Business
Search Scoop  
 
 
Powered by Vodafone
NZ independent news