Asian markets lower on Greece concerns; Australia reports strong jobs number

<p>Asian markets followed the lead from the US and moved lower at the open of trading today. Concerns about the Greek financial situation is definitely […]</p>

Asian markets followed the lead from the US and moved lower at the open of trading today. Concerns about the Greek financial situation is definitely hanging around and dampening sentiment at the moment.

In Australia, the latest jobs data show some strength and they look very strong on face value given the anecdotal evidence of jobs losses we’ve been hearing over the past few weeks. The participation rate was in line with expectations but the number of jobs was much higher, at 46,300 compared to market expectations of 10,000.

The Australian economy, through its diversity and exposure to a huge pipeline of energy and minerals projects, is showing it strength through these numbers.

Full time employment increased by a solid 12,300 jobs, which was also a notch above market expectations. Part time employment was the standout, up 34,000 after last month’s poor numbers.

Any way you slice it, these numbers are very strong and the unemployment rate is down to 5.1% – the envy of many developed countries around the globe.

The corporate reporting season is dominated by Westpac today, which showed a net cash of $1.5bn. This is slightly below market expectations but is impacted by some one-off factors so the market can live with the overall number being a touch soft.

Market consensus numbers will most likely be revised lower for the full year until Westpac can show the first quarter woes were mostly one off and momentum can start to improve in the second and third quarters.

Net interest margins for Westpac were down by 10 basis points, again the same as CBA, but a lot of the Westpac decline was due to issues in treasury and markets income, which when excluded, shows only a modest margin decline of 2 basis points.

Again, the market can live with this and will probably see it as a positive. Asset quality is sound and while arrears have increased slightly, they remain at manageable levels, again similar to what CBA reported yesterday. So overall, possibly some downgrades to earnings estimates for this financial year but no major black spots to worry about.

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