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

 

Company Results: Air NZ Rides The Tourism Boom With Record Full-Year Earnings

Air New Zealand has ridden the tourism boom and staved off increased competition to deliver the best full-year earnings in its 76-year history. More>>

ALSO:

New PGP: Sheep Milk Industry Gets $12.6M Crown Funding

The Sheep - Horizon Three programme aims to develop "a market driven, end-to-end value chain generating annual revenues of between $200 million and $700 million by 2030," according to a joint statement. More>>

ALSO:

Half Full: Fonterra Raises Forecast Milk Price

Fonterra Co-operative Group Limited today increased its 2016/17 forecast Farmgate Milk Price by 50 cents to $4.75 per kgMS. When combined with the forecast earnings per share range for the 2017 financial year of 50 to 60 cents, the total payout available to farmers in the current season is forecast to be $5.25 to $5.35 before retentions. More>>

ALSO:

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:

Get More From Scoop

 
 
 
 
 
 
 
 
 
Business
Search Scoop  
 
 
Powered by Vodafone
NZ independent news