US data vindicates market rally
By Tim Waterer (Senior Trader, CMC Markets)
Macro indicators from the key regions of China, Europe and the US in recent weeks has allowed higher yielding assets to
‘stay the course’ north for 2013, while new funds entering the market from the sidelines is also helping to fuel the
rally.
The financial market rally appeared to receive vindication from the raft of US data on Friday, with traders seeing the
upward revisions to payrolls data as a vote of confidence for US economic progression. Key equity benchmarks are hitting
multi-year highs while commodity traders are also seeing evidence of there being a growth story at play, with US Crude
Oil now poised for a return to trading at US$100 per barrel should the market continue to lean the way of risk.
The Australian Dollar today dipped after the dismal building approvals data, however the currency quickly recovered the
lost ground with traders thinking that the result is unlikely to alter the RBA’s interest rates decision. Recent global
improvements, namely from China, appear to have given the RBA the luxury of sitting on their hands regarding rates for
the time being, though traders are still a little cagey of going long the currency until we see what tone the RBA
strikes with its statement on Tuesday. In the meantime, the Euro continues to attract much of the buying flows with
traders pricing out the disaster scenarios which plagued the currency in 2012.
After a decent start today the Australian sharemarket appeared to take the foot off the gas with some key sectors of the
market unable to sustain the upward momentum. The bumper lead from Wall Street made for a day of green numbers across
most of the Asian region, however the underperformance of the ASX200 today is perhaps due to what can be viewed as a
pre-emptive move higher by the Australian bourse last Friday (where the index added 42 points).
ends