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

 

Onwards and upwards theme continues for financial markets

15.09 AEDT, Wednesday 30 January 2013

Onwards and upwards theme continues for financial markets


By Tim Waterer (Senior Trader, CMC Markets)

Buying momentum continues to be on the side of higher yielding assets, with traders clearly liking what they are seeing in terms of both macro indicators and corporate earnings. Apart from the occasional blip such as the most recent US Consumer Confidence reading, by and large the economic indicators are building a strong case for global economic recovery and the prices of risk assets are responding accordingly. However, the case for economic recovery faces stern cross examination in the form of the US Non-farm Payrolls report come Friday.

The bar is set almost embarrassingly low for the vast majority of key macro indicators for the US, and anything mildly positive is serving to feed more buying enthusiasm. The prevailing market psyche is easily pleased, with traders relieved to see evidence of mild US growth rather than worrying about the headlines from 2012 mostly revolving around Greece. The major US indices are hitting multi-year highs and there could still be more to come while ever data is supportive of the ‘growth’ narrative, which has been the central theme of financial markets so far in 2013.

The Australian sharemarket operated in nonchalant fashion today, with the local bourse touching the 4900 level while also consolidating Tuesday’s bumper gains. Today it was the turn of Materials stocks to push higher with commodity prices having enjoyed a positive offshore session overnight. Meanwhile, banking stocks took what looked like a rest day after their recent push. The story for the ASX200 so far in 2013 has been ‘onwards and upwards’, and while history tells us that the golden run will eventually end, in this instance we could be seeing the 5000 level reached on the index before a pullback happens. Trading conditions remain conducive to the search for yield and this is likely to continue while macro indicators globally show signs of progression.

Tuesday’s NAB Business Confidence reading came at just the right time for the AUD which had looked likely to again slip below 1.04. Confirmation today of an Australian election in September had little impact on the currency with the AUD mostly spending time in the 1.0450-1.0470 range. While the AUD has enjoyed a solid 24 hours based on the more positive outlook from domestic businesses, the fate of the AUD for the remainder of the week could well lie with how US jobs data pans out on Thursday and Friday, and more specifically, by how the US Dollar reacts to the data.

ends

© Scoop Media

 
 
 
 
 
Business Headlines | Sci-Tech Headlines

 

Testing And Decontamination: New Standard On Meth Residue

Standards New Zealand has today released NZS 8510:2017 Testing and decontamination of methamphetamine-contaminated properties ... More>>

ALSO:

Mince, Etc: US Food Poisoning Lawyer At Conference

As New Zealand chefs, food experts, and MPI debate what constitutes a cooked beef burger, leading US food safety litigator Bill Marler, who made his name prosecuting the burger company responsible for a major E. coli outbreak, is keynote speaker at the Food Integrity Conference. More>>

ALSO:

Petya: New Ransomware Campaign Hits Worldwide

A new ransomware campaign known as Petya is affecting computer networks using Microsoft Windows. It was first seen affecting systems in the Ukraine, but is quickly spreading across other computer networks in Europe. More>>

ALSO:

Skodafone Goneski: Sky TV, Vodafone Drop $3.44 Billion Merger Plan

Sky Network Television and Vodafone New Zealand have terminated their merger agreement which aimed to create the country's largest telecommunications and media group, and have withdrawn an appeal against the Commerce Commission's rejection of the plan. More>>

Quake Insurance: Reforms To EQC Act Announced

· Increasing the monetary cap from $100,000 (plus GST) to $150,000 (plus GST) for EQC building cover.
· Clarifying EQC land cover is for natural disaster damage that directly affects the insured residence or access to it... More>>

ALSO: