Local market posts early gains despite lack of direction
10.36 AEST, Thursday 14 March 2013
Local market posts early gains
despite lack of direction from US
By Miguel Audencial (Sales Trader, CMC Markets)
The local equities market posted marginal gains at today’s open despite a lack of direction from its US counterpart, which closed only a whisker past the post of positive territory overnight.
The materials sector is likely to face some downward pressure during today’s session due to weaker commodity prices.
The release of the Australian employment figures later today is likely to provide an indication as to where the market will trade during the rest of the day, if the data is far from expectations of an employment change of 9,500 and a 5.5% unemployment rate.
The strong US Retails Sales number published overnight provided the supplement the US equities market needed to sustain its momentum and notch an impressive ninth straight session of gains. But only just. The Dow posted a very marginal gain of 5.22 points or 0.04%. On the other hand, the retail sales data had a much notable effect on the US dollar, which received support as overseas investors took to the greenback thanks to increased confidence in the US economy. The ICE dollar index was at 82.936 up from 82.585 on the previous session.
Crude oil settled relatively flat overnight closing only 2 cents lower. There was a stale-mate between the tug-of-war of future demand optimism (caused by positive retail sales data) and a higher than expected reported supply inventory figure. The stronger greenback also put downward pressure on crude oil and other US dollar denominated commodities.
The weekly US unemployment claims figure is due to be released tonight. Don’t be surprised if good figures actually result in selling pressure in the US equities market with traders possibly seeing it as a reason for the US Fed to stop its quantitative easing program.