Today’s Commentary
The markets have turned their back on the NZD again over the weekend as risk appetite soured and traders used last weeks upturn to exit long positions.
Despite last Thursdays better than expected US GDP data questions over the sustainability of the global recovery remain. The US government is due to withdraw much of the financing that supported the growth and questions about the future have only grown more intense. A warning that Citigroup may suffer a USD $10 million write-down was enough to tip equity investors over the edge. The Dow finished down over 2.5% and the S&P & NASDAQ had similarly poor sessions.
Economic data was mixed. German retail sales came in well below expectations at -0.50% and US consumer spending contracted. Better than expected manufacturing numbers from the Chicago branch of the Fed and an upward revision to the consumer confidence numbers were unable to make the waters any less muddy.
Looking ahead the RBA cash rate decision due Tuesday may bolster flagging confidence and the latest Fed Funds Rate decision will follow shortly after on Thursday. Locally an update to our labor cost index is due tomorrow morning and new employment numbers will be released on Thursday.
Upcoming Announcements:
• 02 November 09: UK Manufacturing PMI
• 03 November 09: AU Cash Rate
• 03 November 09: ISM Manufacturing PMI
• 03 November 09: Pending Home Sales
• 04 November 09: AU Retail Sales
By Sam Spink - McCarthy, Corporate Dealer
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