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

 


Extent of European market moves indicate real concern

10.05 AEDT, Tuesday 5 February 2013

Extent of European market moves indicate real concern
By Ric Spooner (Chief Market Analyst, CMC Markets)

For the first time this year, the local market opening will follow a significant decline in international markets. Allegations of improper payments to members of Spain’s governing party were the catalyst.

Last night’s developments create a dilemma for investors. On the one hand, they will be conscious of that this news comes after a protracted market rally. In these circumstances, bad news is always likely to trigger a sharp initial reaction as nervous traders rush to protect significant profits. In the longer term, investor action will be limited by the fact that the allegations are at this stage unproven. Even so, markets will monitor this situation closely over the coming days and weeks. If they have any substance, this type of political allegation tends to unfold over a period of time as the media and opposing political parties gradually uncover more facts.

On the other hand, until there is news putting this issue to rest, it is likely to be a source of concern to markets. Ultimately the possibility of a Spanish election could at this stage lead to significant destabilisation of the delicate Eurozone reform alliance. The implications of this risk are reflected in the size of moves in directly affected markets last night, with Spanish 10 year bond yields jumping 0.23% overnight.

The Reserve Bank is unlikely to cut rates or indicate a heightened easing bias today. A wait and see attitude seems likely given the improving international economic outlook, rising asset prices and higher iron ore prices. A decision along these lines is unlikely to have any impact on markets this afternoon.

http://www.cmcmarkets.com/


© Scoop Media

 
 
 
 
 
Business Headlines | Sci-Tech Headlines

 

Statistics: Net Annual Migration Passes 71,000

A record 71,300 more migrants arrived in New Zealand than left in the January 2017 year, Statistics New Zealand said today. This surpassed the previous annual record set in December 2016. More>>

ALSO:

Fossils: Ancient Penguins Lived Alongside Dinosaurs?

Penguins are much older than previously thought and their evolution probably dates back to the days of the dinosaurs, according to research on the fossilised leg bone and toes of a giant ancient penguin found in rocks near Waipara, North Canterbury. More>>

No Voda/Sky: Commission Declines Clearance For Merger

The Commerce Commission has declined to grant clearance for the proposed merger of Sky Network Television and Vodafone New Zealand. More>>

ALSO:

EARLIER:

Power: IEA Report On New Zealand's Energy System

Outside of its largely low-carbon power sector, managing the economy’s energy intensity and greenhouse gas emissions while still remaining competitive and growing remains a challenge. More>>

ALSO:

NASA: Seven Earth-Size Planets Around A Single Star

NASA's Spitzer Space Telescope has revealed the first known system of seven Earth-size planets around a single star. Three of these planets are firmly located in the habitable zone, the area around the parent star where a rocky planet is most likely to have liquid water. More>>

ALSO:

Auckland Transport Case: Men Guilty Of Corruption And Bribery Will Spend Time In Jail

Two men who were found guilty of corruption and bribery in a Serious Fraud Office (SFO) trial have been sentenced in the Auckland High Court today... The pair are guilty of corruption and bribery offences relating to more than $1 million of bribes which took place between 2005 and 2013 at Rodney District Council and Auckland Transport. More>>

ALSO:

Get More From Scoop

 
 
 
 
 
 
 
 
Business
Search Scoop  
 
 
Powered by Vodafone
NZ independent news