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

 

Greece pushed closer to the edge


Greece pushed closer to the edge

The choppy price action looks like it is set to continue with the Greek impasse still somewhat in place and investors exercising caution. All the latest commentary from European leaders has had a fairly pessimistic tone to it regarding a potential deal. Eurozone leaders were somewhat disappointed in Greek Prime Minister Alexis Tsipras for not bringing any fresh proposals to the table at yesterday’s meetings. However, given a new finance minister has just been appointed, I’m not surprised Greece probably needs some time to work its way through some proposals.

European leaders have now given Greece until Friday to come up with some credible proposals. If these fail, a Eurogroup meeting will be held on Sunday to essentially decide Greece’s fate – this would most likely result in an exit.

Trade was risk-off in Europe with bund yields dropping, along with the single currency. EUR/USD finally slipped below the $1.1000 handle and traded to as low as $1.0916 before recovering a touch. This currency pair will be on high alert all week and traders will be looking for opportunities to react to headlines.

China puts commodities on high alert

The selloff in China continued, with wild swings through the session once again. Chinese mainland equities are now down 28% from their June peak and everyone is wondering what sort of ramifications this will have on the economy.

AUD/USD was one of the worst-performing currency pairs and ventured below $0.7400 in overnight trade. While many are blaming the RBA meeting for this, it’s also important to remember the US dollar index was up 0.6% as the greenback gained ground against most currencies. A strong JOLTS job openings reading helped underpin the greenback.

On a fundamental basis recent falls in iron ore and other commodities like oil doesn’t bode well for the AUD. Concerns about a bigger-than-expected China slowdown are also having an impact on the AUD as the market corrects.

The RBA said further weakness in the currency is likely and necessary. Focus now shifts to the FOMC meeting minutes and local jobs numbers due out tomorrow.

Iron ore in focus

Ahead of the open we are calling the ASX 200 down 0.4% at 5562. Yesterday was a strong day for the local market and we’ll be giving up some of those gains at the open. Despite yesterday’s efforts, we are clearly still range-bound with gains capped in the 5600 region. Until a time when growth and income stocks can rally in unison, the ASX 200 will struggle to knock through some of these barriers and outperform.

Iron ore is now at 49.60/t as China’s weakness weighs and this will see pure plays on high alert today. Stability in commodities will be crucial to how the ASX 200 trades through the session. A weaker AUD could also help stem the bleeding for some currency-sensitive stocks.

ends

© Scoop Media

 
 
 
Business Headlines | Sci-Tech Headlines

 

FMA: Cigna Admits Making False And Misleading Representations
Cigna Life Insurance New Zealand Limited has admitted to making false and/or misleading representations to customers in proceedings brought by the Financial Markets Authority (FMA) – Te Mana Tātai Hokohoko... More>>


Statistics: Retail Card Spending Down 0.2 Percent In July
Retail card spending fell $11 million (0.2 percent) between June 2022 and July 2022, when adjusted for seasonal effects, Stats NZ said today... More>>




Barfoot & Thompson: Auckland Rental Prices Inch Up Again, But Upward Trend Could Ease In Coming Months

Data from nearly 16,000 rental properties managed by real estate agency Barfoot & Thompson shows Auckland’s average weekly rent rose by $6.12 (or 1 percent) during the second quarter... More>>




ASB: Full Year Results: Building Resilience Today And For Our Future

In its 175th year, ASB has reported a cash net profit after tax of $1,418 million for the 12 months to 30 June 2022, an increase of $122 million or 9% on the prior year... More>>


Commerce Commission: Draft Determination On News Publishers’ Association’s Collective Bargaining Application
The Commerce Commission (Commission) has reached a preliminary view that it should allow the News Publishers’ Association of New Zealand (NPA) to collectively negotiate with Meta and Google... More>>


Heartland: Retirees Facing Pressure From Higher Cost Of Living And Increasing Debt In Retirement

Heartland has seen a significant increase in Reverse Mortgages being used to repay debt. Among the most affected by the increasing living costs are retirees, many of whom are trying to get by on NZ Super alone... More>>