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More rate cuts

The RBNZ has cut interest rates to 2.00% this morning, and signalled further cuts to come, setting up a sentiment inspired rally at the open in Australia. This may counter-balance weaker commodity prices overnight. European and US share markets provided little guidance, trading slightly lower on reduced volumes.

Unusually both oil and gold fell overnight. This synchronous activity from commodities is usually fuelled by USD moves, yet it was largely still. Further illustrating the unusual overnight session, the AUD rose above 77 US cents despite the drops in commodity markets.

This most likely means local factors will again be the key driver of market activity today. Telstra has missed earnings forecasts by around 10%. However, the announcement of a $1.25 billion buy-back by tender may mollify shareholders, although it seems to fly in the face of management commitments to invest in the business. Other comp[any reports due today include fund manager Magellan, property conglomerate Goodman Group and veterinary services group Green Cross.

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