Australian sharemarket just going through the motions

15.14 AEDT, Monday 11 February 2013

Australian sharemarket just going through the motions

By Tim Waterer (Senior Trader, CMC Markets)

Growing anticipation that the market is due a correction of sorts may apply the brakes to the performance of risk assets this week. While trade balance data from China last week was enough to keep markets feeling content with the state of play, I expect traders will become more discerning when assessing economic data given the elevated levels of benchmark indices around the globe.

What the Chinese trade balance data did do was give the AUD a reprieve, with the currency having been on a notable downtrend amid soft macro data and question marks over future RBA rate cuts. With the AUD in some danger of losing a further 0.25% of its yield over the coming months, the currency has not been attracting quite the same levels of carry-trade buying of late which has left it facing risks well skewed to the downside. Today the AUD put in a fairly uninspiring performance with trading volumes down due to Chinese New Year festivities, with the AUDUSD rate not venturing too far from recent trading ranges.

With the Chinese New Year period sapping Asian markets of much liquidity, the ASX200 spent much of today just going through the motions with traders awaiting further direction on the corporate earnings front as the week progresses. Narrow trading ranges and a general lack of buying conviction resulted in a listless performance from the local bourse, with any ASX200 aspirations of a move to the 5000 level postponed for the time being until new drivers of pro-risk sentiment arrive. Cue the corporate earnings results from some of the big players on the Australian market later in the week as being a potential catalyst in this regard.
ends

© Scoop Media