Weak US market puts dampener on local trading
15.12 AEDT, Thursday 28 March 2013
Cyprus bailout, Italian elections, and weak US market puts dampener on local trading
By Ben Taylor (Sales Trader, CMC
Markets)
Our market has moved lower in a quiet day of trading before the Easter long weekend break. The impact of the Cyprus bailout details, US market falls and Italian election concerns have put a dampener on the last trading day in March.
Traders are watching with anticipation for the reaction from Cyprus citizens as their banks open again following the announced bailout, which levied accounts holding more than 100,000 Euros.
We are also looking to see the consequence of money transfer controls and credit card transaction caps. It will be interesting to see if Italians and Spanish residents show any signs of nervous contagion with their funds in a pre-emptive response to the Cypriot restrictive measures.
The lack of unity from political parties to form a government in Italy ensures Italy will be going back to the polls. Disagreement over the correct method to mend Italy’s social and economic situation is rife among the differing parties who have chosen to wage an all-out verbal attack on each other.
US markets are also failing to rise above the S&P 500’s all-time high. It seems the high is proving a very strong resistance level and giving traders an additional reason to sell following the huge run we have had up to this point.
The TD Securities Melbourne Institute monthly inflation gauge result has inflation sitting in the lower end of the inflation band. While inflation is sitting low the market now believes a rate cut this year is becoming increasingly less likely as the already lower rates continue to improve our economic outlook.
ends