Asian Markets in Red ahead of G-20 Summit

(eToro Blog) Asian markets are trading lower ahead of the G-20 summit. The summit begins today in Cannes, France. The summit was supposed to be a place for leaders to gather and seek foreign contributions to fight the sovereign debt crisis. But the recent decision by Greek Prime Minister to hold a referendum has put all foreign donors on hold. Australian Prime Minister Julia Gillard will attend the G-20 summit and also announce support for the IMF by doubling Australia’s contribution to the fund.

Australia reported that retail sales grew by 0.4% in September. In the previous month, retail sales grew by 0.6%. Australian businesses have welcomed the Reserve Bank of Australia’s decision to cut rates by 25 basis points to 4.5%. The RBA citied financial uncertainty in Europe and for the cooling of demand in developing countries as the reasons behind the switch to a neutral stance. Economists say that despite the rise in retail sales, retailers in Australia are still struggling. Clothing, footwear and personal accessory sales tumbled 8% in the September quarter. Department stores dropped 2.3%. Restaurants and cafés reported a 1.2% rise in the quarter. Sales of food in the retail stores rose 1.4%. Household goods reported a 1.5% rise in sales. Economists are hoping that the rate cuts by the RBA will spur spending by consumers. Retail sales are expected to remain strong for the remainder of the year as Australians move into the holiday season.

New Zealand reported its unemployment rate from 6.5% in Q2 to 6.6% in Q3. The NZD/USD dropped close to 100 pips after the negative release. Analysts were expecting the unemployment rate to drop to 6.4%. The number of jobs created rose by 5000. The number of unemployed rose by 3000. Despite a 0.2% growth in jobs for the same quarter, unemployment rate rose because a lot of discouraged workers returned to the workforce.
The rise in unemployment rate was attributed to the slow reconstruction efforts in Christchurch.

The AUD/USD which is also a measure of rise appetite in the markets has tumbled after the rate cuts and the Greek referendum announcement. The pair has fallen close to 200 pips in the last 24 hours. Traders on OpenBook are slightly bullish on the AUD/USD. The longs have their limits around 1.0600 and stops around 1.0000.

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