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

 


IG Markets - Morning Prices Feb 25


Friday closed the book on some very impressive upward records.

The S&P 500 ended the week 0.3% down (shortened due to President’s Day) to 1515 points and snapped a seven week winning streak - its longest tear since January 2011. The ASX 200 almost held on to its tear away run, looking for six straight winners, however it finished the week down 0.3% to 5018 points after being ahead of last week’s close around 1pm on Friday, ending the run at five. However, it still means 12 of the last 14 weeks have been positive.

Europe on the other hand snapped its three week losing streak. German business confidence figures came in ahead of expectations and ran over the concerns from the day before that the US Federal Reserve will cut back its stimulus spending. This saw the DAX and the CAC back in the green, adding 0.9% and 1.3% respectively as Italians went to the polls. No major winner look to be announced, but it is clear that markets will probably react in two distinct ways depending on the results.

A Bersani-led coalition (centre-left) is expected to win with current technocrat Prime Minister Mario Monti expected to form a coalition government. It is expected to hold the current economic rigor in place and continue to deregulate Italian finances. Markets expect, and want this outcome.

On the other hand, a Berlusconi-led government will cause market destabilisation, as his centre-right party has committed to rolling back current tax increases and reviewing the rise to the retirement age. This could see Italy returning to the days when its borrowing rates were up around 7.5% and unemployment was near 12%.

However, here in Australia we have no real connection to the issues in Italy other than the fact it will most likely impact European sentiment, which tends to be a very soft lead for our market. What we concentrate on is the region that matters - Asia Pacific.

What will affect us this week is regional news; most notably, Chinese data. Today sees the release of HSBC flash manufacturing PMI figures, which is expected to expand for the fifth straight month and should help the beaten-down material space. Investors will be taking to BHP, RIO and FMG with clubs after missing key figures in last week’s reporting season. Increases to Chinese manufacturing will provide a boost to these stocks. This Friday the official manufacturing figures will be released and if they confirm the flash figures from today, fears of a hard landing will be alleviated, plus it will confirm that Asian manufacturing is back online in a big way.

The other major player in our region this week will be Japan. A plethora of Japanese data is due out, including retail sales, industrial production, housing starts and Tokyo core CPI figures, which all should start to show the effects of increased confidence in the country and the lower exchange rate.

What will cause the biggest jump in Japanese investor activity will be the appointment of the new Bank of Japan governor. There are major rumours coming out of Japan with a least three different news agencies, including Reuters, stating that Mr Haruhiko Kuroda is now front runner with some agencies reporting that he has actually been invited to take the position. Kuroda will be the market friendly candidate, however there is still resistance to his appointment. The announcement could be out as early as today, so watch for USD/JPY, EUR/JPY and even AUD/JPY to run away if it comes. This will also have a dramatic effect on the Nikkei. The currency/market correlation will take off on this appointment which will impact on our market sentiment and should see the ASX higher as well.

Moving to the open, we are calling the ASX 200 up 9 points to 5025 (0.2%), however be careful here as several pieces of major data may not have been factored into the pre-match (i.e. the downgrading of the UK’s credit rating by Moody’s). Also, the local earnings season is winding down this week, with the only major players releasing figures being Woolworths, QBE and Oil Search. BHP looks like it will stabilise today with its ADR flat and unchanged from Friday night’s close after dropping $2.47 (6.2%) since Wednesday’s results. Heading into the close of February, the positive start to the year looks set to remain. Looking to March, the question will be; can the current momentum and goodwill remain?

www.igmarkets.com


© Scoop Media

 
 
 
 
 
Business Headlines | Sci-Tech Headlines

 

BusinessDesk: APN's NZME Sees Future In Paywalls, Growth In Digital Sales

APN News & Media has touted a single newsroom concept for its NZME unit in New Zealand, similar to what Germany's Die Welt uses, saying an 'integrated sales proposition' is helping it win market share, including ... More>>

Labour Party: Global Milk Prices Now Lowest In 6 Years

The latest fall in the global dairy price has brought it to the lowest level in six years and shows there must be meaningful action in tomorrow’s Budget to diversify the economy, says Labour’s Finance spokesperson Grant Robertson. “Dairy prices ... More>>

BusinessDesk: NZ Inflation Expectations Creep Higher In June Survey

May 19 (BusinessDesk) - New Zealand businesses lifted their expectations for inflation over the next two years, sapping any immediate pressure on the Reserve Bank to cut interest rates, and prompting the kiwi dollar to jump higher. More>>

BusinessDesk: Lower Fuel Costs Drive Down NZ Producer Input, Output Prices

May 19 - Producer input and output prices fell in the first quarter, mainly reflecting lower fuel costs and weakness in prices of meat and dairy products. More>>

Media: Fairfax Media NZ Announces Senior Editorial Team

Fairfax Media New Zealand has today confirmed its new editorial leadership team, as part of a transformation of its newsrooms aimed at enhancing local and national journalism across digital and print. More>>

Science: Flavonoids Reduce Cold And Cough Risk

Flavonoids reduce cold and cough risk Research from the University of Auckland shows eating flavonoids – found in green tea, apples, blueberries, cocoa, red wine and onions – can significantly reduce the risk of catching colds and coughs. The research, ... More>>


BusinessDesk: RBNZ House Alert Speech The Catalyst For Government Action

Prime Minister John Key all but conceded that pressure from the Reserve Bank of New Zealand for concerted action on rampant Auckland house prices was one of the main catalysts for the government's weekend announcements about tightly ... More>>

BusinessDesk: How To Fall Foul Of The New Housing Tax Rules: Tips From IRD

Just because you rented out your investment property doesn't absolve you from paying tax, says the Inland Revenue Department in a summary of commonly made mistakes by non-professional property investors when it comes to their tax liability.More>>

Legal: Superdiversity Law, Policy And Business Stocktake Announced

Mai Chen, Managing Partner at Chen Palmer New Zealand Public and Employment Law Specialists and Adjunct Professor of Law at the University of Auckland, today announced the establishment ... More>>

Housing: More House Price Gains Expected

House price expectations remain high, with a net 56% of respondents expecting house prices will increase. Fears of higher interest rates are fading, consistent with the RBNZ’s signals this year. Affordability and a lack of houses for ... More>>

TDDA: State-Of-The-Art Drug Testing Laboratory To Open In Auckland

World leading drug testing agencies, The Drug Detection Agency (TDDA) and Omega Laboratories, open New Zealand laboratory More>>

Network: Bigpipe Launches Ultra-Fast Broadband Into Wellington

Bigpipe Launches Ultra-Fast Broadband into Wellington Naked broadband provider Bigpipe has extended its national reach, announcing today, the launch of its unlimited UFB offering into Wellington. The Spark Venture business is giving Wellingtonians the ... More>>

Get More From Scoop

 
 
 
 
 
 
 
 
 
Business
Search Scoop  
 
 
Powered by Vodafone
NZ independent news