NZ market following US / European trends

NZ market following US / European trends

By Chris Smith (General Manager, CMC Markets New Zealand)

Friday 17 December 2010: Shares in New Zealand this week have been generally positive, though the market may disappoint in a relative sense when compared to gains seen around the region. The main measure of share market volatility in the US is currently very low and we are seeing similar behaviour in a number of markets which is in stark contrast to levels that we have seen in recent years.

Share markets around the world continue to place focus on the European and US situations for their leads. With Europe, it is very difficult for the market to price in the negative outcomes that may be awaiting us in the future. Uncertainty will weigh on any financial market until a potential resolution is sighted and we simply are not there yet.

There was a great deal of interest overnight at the release of some important US economic data. At this time, market watchers are not expecting good news however, with the number of people making initial unemployment claims down, the news was better than initially expected. Should this continue to improve, it would go a long way to improving sentiment. The US economy and, in turn the impact that it has on the rest of the world, will be reliant on gains that can be made on the job front and it is this that will really help boost sentiment.

ENDS

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