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


Investors wary ahead of ECB meeting

09.48 AEST, Tuesday 4 September 2012

Investors wary ahead of ECB meeting

By Ric Spooner (Chief Market Analyst, CMC Markets)

The Australian market looks set for a steady days trading as investors wait on the outcome of Thursday’s ECB meeting.

The local market’s tone today will be supported by the ongoing rally in commodities such as oil and silver in response to the prospect of further monetary easing. There has also been minor relief on the iron ore market which has shown some signs of steadying at around $90 per tonne in recent days.

However, traders are wary of committing much more to share markets prior to any announcement on the ECB’s plans to prevent a further blow out in Spanish and Italian bond yields. Based on recent reports, investors are beginning to piece together a scenario under which ECB bond purchases will be limited to shorter maturities and conditional upon countries successfully applying for assistance from the European Stability Funds. Any such arrangement could remove short term funding problems as a source of immediate concern for markets. However, the rise in Spain’s 10 year bond yield from around 6.25% back to 6.85% over the past two weeks indicates ongoing levels of uncertainty over the situation in Europe over the medium term. Markets are likely to remain cautious heading into Thursday when the ECB will meet and Spain is also due to hold a bond auction.

Today’s RBA meeting is unlikely to see any change in interest rates or in the Banks’s neutral stance on current levels. With the recent decline in the Aussie Dollar providing some relief, the Bank is likely to need more evidence of domestic weakness or disruption to international credit markets to re-establish a short term easing bias.


© Scoop Media

Business Headlines | Sci-Tech Headlines


Civil Contractors: Massive Rebound In Civil Construction Business Confidence

New Zealand’s civil construction industry is riding a massive rebound in post-pandemic business confidence – but this may be undermined by skills shortages, which continue to be the industry’s number one challenge... More>>

Energy: Feeling Our Way Towards Hydrogen - Tina Schirr

Right now hydrogen is getting a lot of attention. Many countries are focusing on producing hydrogen for fuel, or procuring it, or planning for its future use... More>>

Maritime Union: Calls For New Zealand Shipping To Resolve Supply Chain Crisis

The Maritime Union says there needs to be innovative responses to ongoing shipping congestion. Maritime Union of New Zealand National Secretary Craig Harrison says it is essential that New Zealand develops its own shipping capacity... More>>

Housing: New Home Consents Continue To Break Records

A record 44,299 new homes were consented in the year ended June 2021, Stats NZ said today. “The annual number of new homes consented rose again in the June 2021 year, the fourth consecutive month of rises,” construction statistics manager Michael Heslop said... More>>

Real Estate: June Home Transfers Remain High
There were 44,517 home transfers in the June 2021 quarter, the highest June quarter figure since 2016, Stats NZ said today. The number of home transfers was very similar to the March 2021 quarter and was up 18,252 from the June 2020 quarter... More>>

Statistics: Household Saving Falls In The March 2021 Quarter

Saving by New Zealanders in the March 2021 quarter fell to its lowest level in two years after rising sharply in 2020, Stats NZ said today. Increases in household spending outpaced income growth, leading to a decline in household saving from the elevated levels that prevailed throughout 2020... More>>