5 Jul 2013
• The Australian share market has had a choppy week, the result of some poor Chinese data and uninspiring local data, but is likely to finish the week a little higher.
• Global markets have also had a disruptive week with the riots and uprising in Egypt along with the disintegration of the Portuguese government and new ultimatums from the European Central Bank to Greece regarding their assistance package.
• World oil prices rose strongly as the uprising in Egypt meant the potential blockage of the Suez Canal – where oil is shipped through to Europe.
• In stock news, Caltex Australia and Woodside Petroleum revised their guidance downwards – in Caltex’s case, quite considerably and the market didn’t take too kindly to it.
• In contrast, QBE and Flight Centre provide positive updates to the market and their share prices rose as a result.
• Brambles announced that they will demerge their information management business, Recall, into a separate company to be listed on the ASX.
• The Australian dollar dropped to a low of 90 cents against the US dollar following some remarks from the governor of the reserve bank of Australia.
• The RBA again left the cash rate on hold at its July meeting with the market now predicting a rate cut at the August meeting.
• US pending home sales rose by 6.7%, well above expectations – the recovery in the US continues and is now picking up pace.
• There was other positive data out of the US regarding employment, personal income and personal spending, and consumer confidence (nearly a 6 year high) all which point to a much improved US economy.
• We had members of the US central bank trying to confuse the market with some members stating that it was too early to reduce stimulus whilst another said the stimulus could be removed in September.
• Members of the US central bank are on somewhat of a publicity drive at present given the Chairman’s term will expire shortly….some friendly competition never hurt, but someone probably needs to remind them of the effect their remarks have on markets globally.
• We had gaffes from our own reserve bank governor who decided to make light of the recent decision not to raise the cash rate….
• This sent the Australian dollar into a tailspin and embarrassed some ANZ economists who actually took him literally and revised their forecasts….which they then re-revised back following clarification of the comments.
• We also have the central bank of China playing a game of chicken with the Chinese banking industry….some banks required liquidity and the central bank held off writing the blank cheque to teach Chinese banks a lesson….this had a negative effect on markets worldwide.
• There was further negative press regarding the NBN rollout with some now saying that creative accounting has been used….never….apparently, more than 30,000 homes counted as being “connected” are unable to order an NBN service, but they’re “connected” right…..
• Kevin Rudd swept into office and appointed his front bench, who now get a holiday given parliament has it’s “winter break” and doesn’t sit again until late August. How we all wouldn’t mind a winter break.
• The new PM is yet to commit to an election date which is a departure from the previous PM who announced an election date some 8 months in advance….he’s obviously not one for certainty.
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