IG Markets Morning Prices

Good morning,

In the US overnight, equity markets suffered significant falls as investors focused on Europe’s efforts to organize an Irish bailout, which failed. Markets were also concerned about speculation out of China that the government will act to slow its economy and possibly introduce measures to slow food-price inflation and discourage commodity speculation.

The NASDAQ was the worst performer, falling 1.8% while the broad-based S&P 500 and Dow Jones Industrial Average both lost 1.6%.

Locally, the ASX is called to open 1.5% lower at 4631 following the bearish overnight leads. In terms of leads, it was a sea of red across US and European markets.

The materials sector will almost certainly be the biggest detractor at the open after the US sector fell 2.2%. Base metals on the London Metals Exchange were smashed, with Aluminium, Copper, Nickel and Zinc all down between 4.6% and 6.8%, hurt by the reports out of China that they were looking at ways to stop commodity price speculation. In normal London trade, Rio Tinto and BHP Billiton fell 4.8% and 3.7%. BHP Billiton’s ADR is pointing towards a fall of 2.1% to $43.54 at the open.

The gold miners will likely be hit hard after gold futures fell another 1.7% to be trading around the US$1341 level.

Elsewhere, both the energy and financial sectors are likely to come under heavy selling pressure after they fell 1.9% and 1.7% in US trade. Bank of America, JP Morgan, Wells Fargo and Citigroup were all down more than 1.2% while Crude Oil futures fell 2.9% to US$82.67 per barrel.

In summary, it looks like we’re in for a very bleak day on the local markets with very little in the way of local or Asian economic data. Having said that, the Wage Price Index is due for release at 11.30am but it’s unlikely to have too much of an impact on markets given the global forces at play.

On currency markets, the AUDUSD and EURUSD continued to come under aggressive selling pressure overnight as global risk aversion continued to boost the US dollar index. The European Union and Ireland were said to be working on some sort of rescue package; however news just in suggests this has failed, with Ireland insisting it can meet its funding needs through mid-2011.

The EURUSD traded to a low of 1.3446 before stabilizing to around the 1.3489 level. The AUDUSD fell to 0.9724 before rebounding to around the 0.9760 level.

Market Price at 8:00am AEST Change Since Australian Market Close Percentage Change
AUD/USD 0.9766 -0.0111 -1.12%
ASX (cash) 4631 -69 -1.47%
US DOW (cash) 11014 -167 -1.49%
US S&P (cash) 1177.4 -18 -1.54%
UK FTSE (cash) 5667 -135 -2.33%
German DAX (cash) 6665 -114 -1.69%
Japan 225 (cash) 9690 -148 -1.50%
Rio Tinto Plc (London) 41.20 -2.10 -4.84%
BHP Billiton Plc (London) 23.18 -0.88 -3.66%
BHP Billiton Ltd. ADR (US) (AUD) 43.54 -0.91 -2.05%
US Light Crude Oil (Jan) 82.67 -2.49 -2.93%
Gold (spot) 1340.6 -23.8 -1.74%
Aluminium (London) 2256 -134 -5.61%
Copper (London) 8201 -391 -4.55%
Nickel (London) 21250 -1070 -4.79%
Zinc (London) 2150 -156 -6.76%
RBA Cash Rate to be raised by 25bp (Dec) (%) 5.00 0 0.00%

IG Markets provides round-the-clock CFD trading on currencies, indices and commodities. The levels quoted in this email are the latest tradeable price for each market. The net change for each market is referenced from the corresponding tradeable level at yesterday’s close of the ASX. These levels are specifically tailored for the Australian trader and take into account the 24hr nature of global markets.

Please contact IG Markets if you require market commentary or the latest dealing price.

ENDS

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