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Global Equities Roundup: Market Talk

5 Mar 2017 8:57 pm
 

2057 GMT [Dow Jones] NZD/USD (Now 0.7022) traders might well be nervous ahead of an expected weak GDT dairy auction this week, where prices could easily fall 5%-10%, says BNZ. There is good support for the Kiwi at the 0.70 level and, to the extent that recent weakness might reflect a positioning shake-out, we wouldn't be surprised to see some sort of recovery in prices the week ahead, the bank adds. (james.glynn@wsj.com; Twitter @JamesGlynnWSJ)

2056 GMT [Dow Jones] The Reserve Bank of Australia is expected to keep its cash rate on hold at a record low 1.5% at a monthly policy meeting Tuesday, according to survey of 10 economists by the Wall Street Journal. Recent data has been upbeat with the economy growing strongly in 4Q, business confidence and conditions lifting, unemployment nudging lower, and Sydney and Melbourne property prices accelerating. With inflation still well below the 2-3% target band, the RBA has scope to keep rates steady for some time yet. RBA Gov. Philip Lowe said in a recent speech lower interest rates would make the housing sector more fragile by driving up already record debt, while indicating interest rates are likely to remain steady this year. (james.glynn@wsj.com; Twitter @JamesGlynnWSJ)
 

2045 GMT [Dow Jones] Australian apartment prices are likely to fall by as much as 20% in some over supplied areas "at some point," while the broader housing market will see price falls of 5% to 10% once interest rates start to rise, says Shane Oliver, chief economist at AMP Capital. But it remains hard to see a generalized housing crash in the absence of much higher interest rates causing a wave of defaults, he adds. (james.glynn@wsj.com; Twitter @JamesGlynnWSJ)
 

2045 GMT [Dow Jones] Australian apartment prices are likely to fall by as much as 20% in some over supplied areas "at some point," while the broader housing market will see price falls of 5% to 10% once interest rates start to rise, says Shane Oliver, chief economist at AMP Capital. But it remains hard to see a generalized housing crash in the absence of much higher interest rates causing a wave of defaults, he adds. (james.glynn@wsj.com; Twitter @JamesGlynnWSJ)

2041 GMT [Dow Jones] A leading Australian economist says the OECD was right to issue a warning about risks to the economy from soaring house prices and record household debt levels last week. Shane Oliver, chief economist at AMP Capital, one of the country's biggest fund managers, says such risks are real, particularly with Sydney house prices up 73% over the last five years, against wages growth of just 13%. Falling housing affordability, excessive home price gains and household debt growth remain "Australia's Achilles heel," he added. (james.glynn@wsj.com; Twitter @JamesGlynnWSJ)

2039 GMT [Dow Jones] Australia's housing market continues to shows signs of heating up, with a measure of successful property sales by auction in major capital cities rising over the weekend. According to property group Domain, auction clearances nationally stood at 77.9%, up from 77.3% in the previous week and up from 69.6% a year ago. The largest market of Sydney remains strong, with a clearance rates of 78.3% over the weekend, up from 75.6% a week ago and 69% a year ago. Surging property prices and record household debt are key concerns for the RBA, which indicated recently it will refrain from lowering interest rates further to avoid making to situation worse. (james.glynn@wsj.com; Twitter @JamesGlynnWSJ)

2036 GMT [Dow Jones] More than a million Australian home owners will struggle with mortgage stress if interest rates were to rise only a few notches from current record lows, according to research firm Digital Finance Analytics. Mortgage stress would not be limited to lower income areas, the research shows. The beach suburb of Sydney, Bondi, would be among the hardest hit. Similarly Toorak, a suburb of Melbourne, would also come under strain. The research, published in the Australian Financial Review, emerges amid heightened concerns around record household debt in Australia. The RBA recently made it clear it is reticent to lower interest rates further lest it fan further strength in house prices and growth in debt.(james.glynn@wsj.com; Twitter @JamesGlynnWSJ)
 

0724 GMT - Chinese lawmakers will review an amended draft of the country's securities law in April, although changes are likely to focus on increased enforcement power as opposed to pushing ahead with overhauls. Fu Ying, a spokeswoman for the national legislature, said Saturday at a news conference that the National People's Congress Standing Committee next month will review a draft that will "relate to protection of investor interests." This would mark the second reading by the legislature, after one of an amended draft in 2015 before that year's summer stock rout. At that time, expectations were high that a new securities law would address a revamp of China's IPO system, where hundreds of companies are waiting for a listing. In China, drafts go through at least three readings by the legislature before approval. (chao.deng@wsj.com)

(END) Dow Jones Newswires

March 05, 2017 15:57 ET (20:57 GMT)

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