Markets await Rate decision

5 November 2013

Markets await Rate decision

By Tracey Warren (Stockbroking Sales Executive, CMC Markets Stockbroking)

Global stocks edged higher overnight with the S&P 500 extending a four week winning streak to close just below its all-time high. It was a lack lustre session with investors anticipating key US non-farm payroll data due Friday night for more Fed Reserve tapering clues. The ASX 200 led from the gates in the green yesterday but a lack of conviction and an indecisive reaction to local data saw it stall.

Yesterday’s economic releases entrenched widely held expectations that the RBA will leave interest rates unchanged this race day. Capital city house prices rose 1.9% in September and up 7.6% y/y. Retail sales provided some economic hope with the market was stunned with a rise of 0.8% in September.

The Australian dollar is back around 0.9500 this morning with the currency likely to drive further rate cuts in 2014. Comments on the currency with the RBA rate decision and accompanying Statement watched closely.

The Euro managed to claw back some ground overnight after last week’s deflation fears subsided and positive manufacturing data providing some relief. Gold and oil held steady at US 1,315.50 an ounce and US $106.23 respectively, with Metals showing signs of tapering jitters falling a percent or more overnight.

Service sector PMI’s are due for Australia, China and UK is due along with the highly anticipated RBA Rate decision at 2:30pm today.

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