Return to risk-on

Return to risk-on

By William Leys (Sales Trader, CMC Markets)
6 March 2013

The Australian market is trading higher this morning, following a record breaking day in the US and a return to 'risk-on' sentiment.

The Dow ascended to its highest ever close (14,255.84 points) after the release of better than expected ISM Non-Manufacturing PMI data, signalling expansion in the world’s biggest economy. It seems the matter of sequestration, and the implications it poses for growth, has been temporarily put on the back burner.

Departing Chinese Premier, Wen Jiabao, also fuelled the optimism, by pledging to sustain China's growth in 2013 through record government spending. The announcement appears to have also tempered the concerns surrounding the government's initiative to cool the property market.

Focus has now shifted to the domestic GDP December quarter 2012 results, due at 11:30 AEDT today. The expectation is for growth of 0.6%. A reading greater than this will likely extend equity gains into the afternoon, and provide another boost for the resurgent AUD. Conversely, a reading below the expectation may halt today's rally and sober the market.

www.cmcmarkets.com

ENDS

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