Australian market rebounds higher defying US leads

15.22 AEDT, Wednesday 25 October 2012

Australian market rebounds higher defying US leads

By Ben Taylor (Sales Trader, CMC Markets)

The Australian market has rebounded slightly higher today following this week’s correction. We have defied US leads overnight amid soft commodity prices and the Federal Reserve’s growth outlook.

Australian property companies and the healthcare sector are driving our market higher today. The defensive lead is being bought up on yield and earnings certainty over risker plays. After a couple of days of falls this week progress is going to be slow.

The majority of today’s attention has been taken by our Aussie dollar which continues to climb towards 1.04. Yesterday’s Australian inflation figures and to a lesser degree the Chinese flash PMI took the market by surprise and has some FX traders questioning the widely expected November rate cut.

All eyes will be on tonight’s US durable goods orders following last month’s woeful release which had the market worrying that a slowdown in the factory sector could point to a wider spread slowdown across the US economy.

The US weekly unemployment claims will also be watched following the US Federal Reserve’s overnight comments regarding moderate growth and plans to stimulate the economy until the unemployment situation improves.
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