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

 


Governor’s speech settles the mood

15.28 AEDT, Friday 22 February 2013

Governor’s speech settles the mood


By Tim Waterer (Senior Trader, CMC Markets)

With the FOMC playing the role of the Fun Police this week by contemplating stimulus withdrawal, financial markets have shown their petulant side after a period of prolonged best behaviour so far in 2013.

The Fed Minutes gave traders a glimpse into the QE-free future. Clearly the idea of the US economy having to support itself without relying on stimulus was too much to bear for investors at this stage, as evidenced by the size of the market downswings this week. Any winding down of asset purchases should signify an improving economy and one that is no longer in need of life support which by itself should be a good thing, but traders just don’t have the confidence in the economy to see it walking under its own power yet.

The speech by the RBA Governor appeared to come across as the voice of reason today in settling some rattled nerves. In fact, the rather hawkish tone struck by Glenn Stevens on the state of the global economy was in stark contrast to the risk-off conditions which sent equity markets plummeting the day prior. Based on the Governor’s comments today a conclusion could be reached that the level of interest rates has already bottomed out, which saw the AUD immediately come back into favour on the yield implications if in fact the end of the easing cycle has already been reached.

Australian investors appear to have dusted themselves off after the heavy fall on Thursday with the ASX200 posting a comeback performance to end the week. The relatively rosy tone conveyed by the RBA Governor earlier in the day appeared to rub off on investors who re-commenced the search for yield, with the banking stocks again helping to drive the local bourse higher. All in all it was a solid recovery on the ASX given the weak offshore leads as well as subdued performances across other Asian markets.
ends

© Scoop Media

 
 
 
 
 
Business Headlines | Sci-Tech Headlines

 

Scoop Business: Equity Crowd Funding Carries Risks, High Failure Rate

Equity crowd funding, which became legal in New Zealand this month, comes with a high risk of failure based on figures showing existing forays into social capital have a success rate of less than 50 percent, one new entrant says. More>>

ALSO:

Scoop Business: NZ Migration Rises To 11-Year High In March

The country gained a seasonally adjusted 3,800 net new migrants in March, the most since February 2003, said Statistics New Zealand. A net 400 people left for Australia in March, down from 600 in February, according to seasonally adjusted figures. More>>

ALSO:

Hugh Pavletich: New Zealand’s Bubble Economy Is Vulnerable

The recent Forbes e-edition article by Jesse Colombo assesses the New Zealand economy “ 12 Reasons Why New Zealand's Economic Bubble Will End In Disaster ”, seems to have created quite a stir, creating extensive media coverage in New Zealand. More>>

ALSO:

Thursday Market Close: Genesis Debut Sparks Energy Rally

New Zealand stock rose after shares in the partially privatised Genesis Energy soared as much as 18 percent in its debut listing on the NZX, buoying other listed energy companies in the process. Meridian Energy, MightyRiverPower, Contact Energy and TrustPower paced gains. More>>

ALSO:

Power Outages, Roads Close: Easter Storm Moving Down Country

The NZ Transport Agency says storm conditions at the start of the Easter break are making driving hazardous in Auckland and Northland and it advises people extreme care is needed on the regions’ state highways and roads... More>>

ALSO:

Houses (& Tobacco) Lead Inflation: CPI Up 0.3% In March Quarter

The consumers price index (CPI) rose 0.3 percent in the March 2014 quarter, Statistics New Zealand said today. Higher tobacco and housing prices were partly countered by seasonally cheaper international air fares, vegetables, and package holidays. More>>

ALSO:

Notoriously Reliable Predictions: Budget To Show Rise In Full-Time Income To 2018: English

This year’s Budget will forecast wage increases through to 2018 amounting to a $10,500 a year increase in average full time earnings over six years to $62,200 a year, says Finance Minister Bill English in a speech urging voters not to “put all of this at risk” by changing the government. More>>

ALSO:

Get More From Scoop

 
 
Computer Power Plus
 
 
 
 
 
 
 
 
Business
Search Scoop  
 
 
Powered by Vodafone
NZ independent news