IG Markets - morning thoughts and opening prices

IG Markets - morning thoughts and opening prices

US markets were relatively flat overnight, as investors traded cautiously ahead of a conclusion from Greece debt negotiations. There is yet to be any confirmation of a result out of Greece, but reports continue to suggest that the Greek government is close to a deal with private creditors. In other developments, Germany is considering running the EFSF and the ESM in parallel. However, this has been suggested in the past, and we suspect the hurdles such a move would face might make this much harder than it seems.

Among the major averages, the Dow Jones Industrial Average lost 11 points to close at 12710. The S&P rose a point to 1316, but the NASDAQ fell 0.1% to finish at 2784. After the strong start to the year we have had so far, some analysts are beginning to feel we are in overbought territory and are beginning to lock in profits after recent gains.

It appears that terms have in fact been provisionally agreed between Greece and the IIF, but the plan is now being vetted by the EU/IMF. Reports surrounding a settlement on the Greek Private Sector Involvement are increasingly conflicting, after a finance ministry source noted that there will be a final offer on the bond swap by February 13, and the Eurogroup said that current talks on the debt deal were 'constructive', but other sources warned that there is currently no intention by either the eurozone or the IMF to give more money to Greece. This has seen investors increasingly cautious and extinguished an attempt by risk assets to rally overnight.

Overall, it was a fairly buoyant night for risk assets, with gains seen in commodities and risk currencies. This suggests the local market is in for a positive start with a recovery in the materials sector, which struggled yesterday. We expect yet another quiet session, with most of the Asian region closed as countries celebrate the Chinese New Year. Ahead of the open, we are calling the Aussie market to open up 0.2% at 4235. With a quiet session for the region on the cards, the local market might struggle to hold on to early gains in the absence of a catalyst.

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.

www.igmarkets.com.au

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