Markets head into final stretch after soggy November
Futures markets were disrupted by an outage on Friday.
The kiwi dollar nudged higher and Australian futures are pointing to a steady start to the week as investors bounce back from a weak November when benchmark indices of the NZX and ASX were on the red side of the ledger for the month.
Stocks on Wall Street rallied on a short Friday trading session, while European markets were also stronger as traders continue to expect the Federal Reserve will cut its key rate later this month, although futures trading was disrupted by an extended outage at CME Group.
Normal service has resumed for carriers Air New Zealand and Qantas Airways’ Jetstar unit after a global recall by Airbus needed software updates.
And after the flurry of earnings and annual meetings, key data today include Statistics New Zealand’s October building consents figures, while Australia’s big event this week is its September quarter gross domestic product release.
Santa rally?
The kiwi dollar increased to 57.33 US cents at 7am in Auckland from 57.21 cents last week, while Australian futures are pointing to 0.1% gain for the S&P/ASX 200 index when trading opens across the Tasman, following a strong end to November for Wall Street and European stock markets on Friday.
The S&P 500 index rose 0.5% on Friday and the tech-heavy Nasdaq Composite gained 0.7%, while the UK’s FTSE 100, Germany’s DAX 30 and France’s CAC 40 all advanced 0.3%, as investors’ expectations for a rate cut by the Federal Reserve remain firm.
Futures trading was disrupted for several hours on Friday after the CME Group, the world’s biggest exchange operator by market value, experienced its longest outage in years after a cooling failure at a data centre in Chicago.
Stock markets had a rugged November, with New Zealand’s NZX50 snapping six months of gains as it fell 0.4%, while the ASX200 fell 3% and the Nasdaq declined 1.5% as the global mood soured in stock markets, with heightened scepticism about the strength of the artificial intelligence boom.
“US equities made modest gains into month-end with investors having to contend with a technical issue at CME Group that disrupted futures trading including for stock indices, treasuries, gold and oil contracts,” Bank of New Zealand senior interest rate strategist Stuart Ritson said in a note.
Clear skies
Carriers are back in view after Europe’s Airbus ordered immediate repairs to 6,000 of its A320 jets around the world, disrupting flights in New Zealand over the weekend. Air New Zealand and Jetstar said they’re both back to normal operations after updating software to fix the issue.
New Zealand’s corporate earnings season ended last week, with firms generally more upbeat about the coming year, in line with improving confidence in the latest ANZ surveys.
Local data today include Stats NZ’s October building permits figures, which are expected to keep showing signs of life in new consents.
And ASB Bank’s housing confidence survey showed a net 28% of respondents think it’s a good time to buy a house, up 2 points from the previous survey, while a net 43% think rates will fall, compared to a net 36% previously.
Meanwhile, across the Tasman, Australia’s September quarter GDP figures are the main event this week, with robust growth expected to further complicate the Reserve Bank of Australia’s efforts to curb inflation.
Reporting by Paul McBeth. Image from Michael Rausch on Unsplash.
