Local market follows US higher

Local market follows US higher

By William Leys (Premium Client Manager, CMC Markets)
4 July 2013

The Australian market has made a strong start to the day, following the lead of Wall Street overnight.

US equities climbed after the release of better than expected employment data for June. This data provided yet another indication of a strengthening US economy and it was enough to quell the concerns surrounding Europe’s fresh debt issues as well as the political turmoil in Egypt. However, trading volumes were thin and the session was shortened due to the Independence Day holiday so the market’s reaction to Fridays US Non-Farm Payrolls figures will provide a more accurate gauge on current sentiment.

Locally our market has continued in its Jekyll and Hyde form. Significant volatility has characterised the action of late with large swings in both directions. Fortunately it’s the gains being amplified today led by the industrial sector. However, the Building Approvals data release has come in just below expectations so we may see momentum slow a little into the afternoon.

The AUD has steadied itself this morning trading against the USD at just under the 91 cent mark. Traders will be paying close attention to the speech by RBA deputy Governor Phillip Lowe from 12.30pm AEST, as his language may provide further insight into the RBA’s rate agenda. However, he’s likely to choose his words carefully given Governor Stevens recent joke gaffe.

www.cmcmarkets.com

ENDS

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