IG Markets Morning Prices 23 May 2011

In the US on Friday, stocks came under selling pressure once again as investors grappled with further signs of slowing growth in the US and a myriad of factors caused further concerns over the European sovereign debt situation. These included uncertainty of Spanish elections and further downgrades to Greek and Italian credit ratings.

The S&P 500 was the worst performer, down 0.8% while both the Dow Jones Industrial Average and NASDAQ fell 0.7%.

Locally, the ASX 200 is called to open the session 1.3% weaker at 4696 following the bearish set of leads from Friday’s trade. All US sectors finished in the red with the financials, industrials, materials and consumer discretionary sectors among the worst performers.

Our cyclical sectors are likely to lead the market lower with materials probably at the fore. Base metals were mostly lower on the London Metals Exchange while in UK equities trade, Rio Tinto and BHP Billiton fell 0.8% and 0.5% respectively. Unsurprisingly, BHP’s ADR is calling the locally listed stock 0.8% lower at $43.68. On a brighter note, there may be some buying support for precious metals as gold futures rallied 1% to US$1512.00/oz; it has opened this morning’s trade at US$1519/oz.

Elsewhere the negative sentiment is likely to flow through our financial and industrial stocks. The likes of JPMorgan, Bank of America, Citigroup and Wells Fargo were all down more than 0.9% while in the industrials space, Caterpillar, Deere & Co and Boeing all saw selling pressure.

The energy sector as one of the better relative supporters in US trade, only declining 0.1%. It was a wild ride for crude oil futures; after being down significantly early, a report from the American Petroleum Institute indicating demand for petroleum had increased during April saw the black gold reverse its sell off, eventually finishing the session up 1% at US$99.90/bbl.

In summary, it looks like we’re set for a sharply weaker open to the new trading week as concerns in the Eurozone continue to gather momentum. US futures have opened quite a bit lower this morning so there may be further downside risk on the open, although we are calling the market down 1.3% already. It could be worth watching the market closely for signs of early buying if traders see the selloff as overdone.

In currency markets, it was all about the EURUSD on Friday as it came under strong selling pressure and closed sharply lower. It traded up to 1.4340 before coming off hard and closing the session at 1.4155 as worries over the debt situation worsened. Elsewhere, the AUDUSD had a bit of a wild ride but ended up flat on the session. It traded between lows of 1.0608 and highs of 1.0709 before ultimately closing 5 pips higher at 1.0670. However, it opened this morning’s session 20 pips lower.

There is little in the way of local economic news although the HSBC PMI reading out of China will likely be watched closely.

Market | Price at 8:00am AEST | Change Since Australian Market Close | Percentage Change
AUD/USD | 1.0643 | -0.0015 | -0.14%
ASX (cash) | 4696 | -61 | -1.28%
US DOW (cash) | 12485 | -117 | -0.92%
US S&P (cash) | 1330.2 | -13 | -0.95%
UK FTSE (cash) | 5937 | -38 | -0.64%
German DAX (cash) | 7235 | -141 | -1.90%
Japan 225 (cash) | 9526 | -86 | -0.90%
Rio Tinto Plc (London) | 41.15 | -0.35 | -0.84%
BHP Billiton Plc (London) | 23.60 | -0.11 | -0.46%
BHP Billiton Ltd. ADR (US) (AUD) | 43.68 | -0.37 | -0.84%
US Light Crude Oil (Jul) | 99.91 | 0.66 | 0.66%
Gold (spot) | 1512.0 | 14.60 | 0.98%
Aluminium (London) | 2502.00 | -6.00 | -0.24%
Copper (London) | 9080.00 | 100.00 | 1.11%
Nickel (London) | 23600.00 | -98.00 | -0.41%
Zinc (London) | 2151.00 | -2.00 | -0.09%
RBA Cash Rate to be raised by 25bp (Jun) (%) | 18.00 | 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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