IG Markets Morning Prices

Good morning,

With US markets shut for their Presidents Day holiday overnight, the focus was on European markets and how they reacted to the ongoing turmoil in the Middle East. The FTSE 100, French CAC 40 & the German DAX were all down more than 1% as oil prices spiked more than 6% as tensions in the Middle East escalated.

Based on European trade, the local ASX 200 is called to open the session 0.3% weaker at 4884. Focus will also be on the reopening of US futures and bond markets at 10am AEST.

It looks like yesterday’s selling pressure will continue as all sectors in the UK saw weakness overnight, with the financials and materials among the worst hit.

Modest gains among base metal prices on the London Metals Exchange are unlikely to help too much as Rio Tinto and BHP Billiton fell 1.9% and 0.7% in normal London trade. On the upside, we could continue to see gold names benefitting from the flight to safe haven assets after the precious metal added another 0.8% to be trading at US$1406.70 per ounce.

The energy sector is the other sector which is likely to be under close scrutiny after Crude Oil prices surged 4.5% to US$95.39 per barrel overnight on the tensions in the Middle East. However, despite the move in crude prices, the sector in London was sold off to the tune of 0.6%. It will interesting to see the reaction among Australian oil names; while the demand for oil has been seen as a proxy for the global economic recovery, there will come a tipping point where higher oil prices will actually hinder the recovery. It’s also worth noting that Oil Search reports its full year result today.

In summary, it looks like we’ll see the market move lower again today as the heavyweight materials and financial names come under pressure. Among other sectors, trade is likely to be dominated by the modestly bearish sentiment that is sweeping across global markets.

There is nothing in the way of local economic data but the earnings season rolls on with the likes of Macarthur Coal, Australian Worldwide Exploration, Fairfax Holdings, Onesteel & Seek all reporting half year results.

Market Price at 8:00am AEST Change Since Australian Market Close Percentage Change
AUD/USD 1.0093 -0.0024 -0.24%
ASX (cash) 4884 -16 -0.32%
US DOW (cash) 12331 -46 -0.37%
US S&P (cash) 1332.3 -10 -0.74%
UK FTSE (cash) 6010 -55 -0.91%
German DAX (cash) 7325 -92 -1.24%
Japan 225 (cash) 10752 -95 -0.88%
Rio Tinto Plc (London) 43.12 -0.85 -1.94%
BHP Billiton Plc (London) 23.75 -0.16 -0.69%
BHP Billiton Ltd. ADR (US) (AUD) 45.77 closed -
US Light Crude Oil (Apr) 95.39 4.07 4.46%
Gold (spot) 1406.7 11.57 0.83%
Aluminium (London) 2584.00 10 0.39%
Copper (London) 9849.00 4 0.04%
Nickel (London) 29400.00 126 0.43%
Zinc (London) 2595.00 28 1.09%
RBA Cash Rate to be raised by 25bp (Mar) (%) 6.00 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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