IG Markets Morning Report

Good morning,

On Wall Street overnight, US stocks ended a very quiet pre-Christmas session mixed after several key economic reports met market expectations. Impressively, core durable goods orders came in at the highest level since March while consumer sentiment was the loftiest since June. With US markets not trading tonight, they logged their fourth straight weekly gain.

The Dow Jones Industrial Average was the best performer, up 0.1% while both the NASDAQ and S&P 500 fell 0.2% respectively.

Locally, the ASX 200 is called to open the session slightly weaker at 4794, 0.1% weaker and just below the psychologically important 4800 level.

In terms of sectors, the financials space was the major detractor, losing 0.8%. On the back of this, we could see some modest profit taking across local names, especially following yesterday’s strong performance. Industrial weakness in the US may also be a headwind for local names.

Despite a positive US lead, it looks like the materials space could see some selling pressure too after fairly lackluster leads from elsewhere. On the London Metals Exchange, base metals were mostly weaker while in normal London trade, Rio Tinto and BHP Billiton declined 1% and 0.7% respectively. In line with this, BHP Billiton’s ADR is calling the locally listed stock to open 1.1% weaker at $45.96. Gold miners could see some minor weakness too after the precious metal retreated to around the US$1380.1/oz level.

The only real potential bright spot could be the energy sector which is likely to benefit from another gain in Crude Oil prices. The ‘black gold’ has now surged through US$91 per barrel, up 1% since our 4.30pm close yesterday. It will also be worth watching Riversdale Mining to see if the market bids them higher in expectations of a counter bid to Rio Tinto’s $16 offer.

In summary, it’s likely to be an extremely quiet, shortened trading session today with a slight bias to the downside. In currency markets, the AUDUSD managed to maintain its position above the parity mark overnight, hitting a high of 1.0065. It’s now bumping around the 1.0043 level in very light trade.

Market Price at 8:00am AEST Change Since Australian Market Close Percentage Change
AUD/USD 1.0045 0.0032 0.32%
ASX (cash) 4794 -5 -0.10%
US DOW (cash) 11578 12 0.10%
US S&P (cash) 1257.4 -3 -0.21%
UK FTSE (cash) 5995 -2 -0.03%
German DAX (cash) 7056 -25 -0.35%
Japan 225 (cash) 10265 -93 -0.90%
Rio Tinto Plc (London) 45.35 -0.45 -0.97%
BHP Billiton Plc (London) 25.88 -0.18 -0.71%
BHP Billiton Ltd. ADR (US) (AUD) 45.96 -0.51 -1.10%
US Light Crude Oil (Feb) 91.52 0.91 1.00%
Gold (spot) 1379.8 -8.1 -0.59%
Aluminium (London) 2438 -30 -1.22%
Copper (London) 9312 12 0.13%
Nickel (London) 23840 -260 -1.08%
Zinc (London) 2291 -32 -1.38%
RBA Cash Rate to be raised by 25bp (Feb) (%) 6.30 0.00 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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