Investors exercise caution after mixed data release

Investors exercise caution after mixed data release

By William Leys (Sales Trader, CMC Markets)
3 April 2013

Despite positive leads offshore overnight, and the release of key local economic data mid-morning, the All Ords is yet to find direction.

In the US, encouraging manufacturing data and robust results from US car makers drove equities to record highs, before gains were trimmed late in the day. In Europe, markets rose, albeit on thin volumes, as Cyprus was granted additional latitude in meeting its bailout requirements.

Locally, the ABS trade balance data for February came in at approximately negative 0.18 billion, above the forecast of negative 1 billion. In its own right, this may be viewed as a sign of strength for the economy and perhaps evidence that previous interest rate cuts are achieving the desired effect, as suggested by the RBA's Glenn Stevens yesterday.

However, the better than expected trade balance result was offset by weak Housing Industry Association new home sales for February, down 5.3%, and this has been enough to keep investors exercising caution into the afternoon.

www.cmcmarkets.com

ENDS

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