IG Markets Morning Prices 21/6/11

In the US overnight, stocks rallied to finish broadly higher after futures were at one point calling the market about 0.5% lower on fears over the Greek debt crisis. After the EU Finance ministers delayed a decision on the next tranche of Greek aid, market globally sank forcing Luxembourg Prime Minister Claude Juncker to reassure markets that a deal will be done. This eased concerns significantly and saw currencies and equity markets rally strongly from the lows.

The Dow Jones Industrial Average was the top performer, rising 0.6% while both the NASDAQ and S&P 500 added 0.5%.

Locally, the ASX 200 is called to open the session 1.1% higher following yesterday’s strong intraday reversal that saw it go from up 0.8% to down 0.7%. Gains were broad-based in overnight action so we’re likely to see a broad-based bounce locally

Material, industrial and consumer discretionary sectors were the best performers overnight, all rising 0.9%. In the materials space, base metals on the LME were mixed while in London equities trade, Rio Tinto rose 0.2% and BHP Billiton retreated 0.2%. However, in a rebound from yesterday’s trade BHP is called to open the session 1.6% higher at $42.01. Gold names should be supported after precious metal nudged higher to be trading at US$1540.70/oz.

We should also see a bit of a snapback rally in the energy sector following a 0.3% gain in the US and a 2.4% rise in crude oil prices to US$93.82/bbl. The likes of ExxonMobil, Chevron and ConocoPhillips were all up more than 0.5%.

Financials were the worst relative performers overnight, only managing a flat finish. Bank of America, Goldman Sachs and Morgan Stanley were all down more than 0.8% after Citigroup cut its price targets for all three stocks. Citigroup said a tough regulatory environment and a dip in commodity trading volumes could hurt earnings for some of the largest banks.

In summary, it looks like we’re going to see a broad-based rebound as the market recovers a large chunk of what it lost yesterday following the indecision from the EU Finance Ministers meeting. They key focus, as we’ve seen in both Friday’s and yesterday’s session is whether or not the market can hold on to any of its early gains.

They key event for today’s market will be the release of the latest Monetary Policy Meeting Minutes at 11.30am. As it stands, the market is a little confused; RBA Governor Glenn Stevens’s speech continues to be hawkish compared to a more dovish RBA statement two weeks ago. Nonetheless, interest rate futures are not factoring in a full rate rise in Australia for at least 17 months, reflecting the current uncertainties plaguing markets. The market will be looking closely for information on what the trigger will be for the next rise; it’s more than likely the Q2 CPI reading due late July.

In currency markets, the AUD/USD sold off in line with equity markets and other risk currencies following the delays announced from the EUFIN meeting yesterday. However, following the reassurances overnight from Luxembourg Prime Minister Claude Juncker, it recovered most of its losses to close the session at 1.0579, well off lows of 1.0495.

The EUR/USD traded in the exact same fashion, hitting lows of 1.4190 during yesterday’s European session before rebounding strongly and closing the session higher at 1.4302.

Market / Price at 6:30am AEST / Change Since Australian Market Close / Percentage Change
AUD/USD / 1.0582 / 0.0047 / 0.44%
ASX (cash) / 4499 / 47 / 1.05%
US DOW (cash) / 12075 / 149 / 1.25%
US S&P (cash) / 1278.4 / 16 / 1.29%
UK FTSE (cash) / 5701 / 35 / 0.62%
German DAX (cash) / 7169 / 68 / 0.95%
Japan 225 (cash) / 9439 / 86 / 0.92%
Rio Tinto Plc (London) / 40.95 / 0.10 / 0.24%
BHP Billiton Plc (London) / 22.59 / -0.05 / -0.24%
BHP Billiton Ltd. ADR (US) (AUD) / 42.01 / 0.65 / 1.56%
US Light Crude Oil (Jul) / 93.82 / 2.19 / 2.40%
Gold (spot) / 1540.7 / 3.10 / 0.20%
Aluminium (London) / 2526.00 / -10 / -0.39%
Copper (London) / 9011.00 / 16 / 0.18%
Nickel (London) / 21750.00 / 264 / 1.23%
Zinc (London) / 2182.00 / -11 / -0.50%
RBA Cash Rate to be raised by 25bp (Jul) (%) / 7.00 / -3 / -3.00%

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

© Scoop Media