IG Markets – morning thoughts

IG Markets – morning thoughts

In US trade, markets trimmed losses to finish the session modestly weaker. Uncertainty surrounding a deal between Greece and private bond holders continues to dampen sentiment. Some investors now feel that the lack of a Greek solution will deter European leaders from working on a long-term funding solution at the European summit.

Among the major averages, the Dow Jones Industrial Average lost 0.1% to close at 12654. The S&P shed 0.3% to close at 1313 and the NASDAQ declined 0.2% to close at 2817. Major indices were each down by more than 1% in early trade, only to claw their way back throughout the day.

The risk aversion we saw, particularly in European trade, is likely to weigh on the Aussie market this morning. However, we have recently seen investors buying dips as opposed to selling rallies which is positive for the market. As a result, we are likely to continue seeing stocks in a holding pattern as investors wait for the next catalyst before a big move. Sentiment might also be lifted by reports that Germany might soften their position on forcing Greece to submit to external controls of their budget setting process.

Fitch placed Australia’s four major banks on review for possible downgrades after market close yesterday. However, we don’t feel this will be a big mover for banking shares today. Fitch downgraded five eurozone nations on Friday. The response to the downgrades was fairly muted, suggesting that investors are paying less attention to ratings agencies. However, the return of eurozone debt concerns could see bank stocks struggle.

The Malaysian government will issue a statement in the next few days on whether rare earths miner Lynas Corp may be granted a pre-operating refining license. The decision will also bring peers like Arafura and Greenland Minerals and Energy into focus. Investors should also keep an eye out for Woolworths’ quarterly sales numbers. On the economic front, we have NAB business confidence and private sector credit data due out at 11.30am. We don’t think this data will have much impact on today’s trade. Ahead of the open, we are calling the Aussie market down 0.1% at 4271.

Market Price at 8:30am AEST Change Since Australian Market Close Percentage Change
AUD/USD 1.0595 0.0005 0.05%
ASX (cash) 4271 -5 -0.12%
US DOW (cash) 12659 48 0.38%
US S&P (cash) 1314.0 4 0.31%
UK FTSE (cash) 5681 -37 -0.65%
German DAX (cash) 6465 -16 -0.25%
Japan 225 (cash) 8761 -28 -0.32%
Rio Tinto Plc (London) 37.99 -0.11 -0.29%
BHP Billiton Plc (London) 21.51 -0.24 -1.10%
BHP Billiton Ltd. ADR (US) (AUD) 37.50 -0.17 -0.45%
US Light Crude Oil (Mar) 98.98 -0.05 -0.05%
Gold (spot) 1730.0 -3 -0.14%
Aluminium (London) 2279.00 13 0.57%
Copper (London) 8429.00 -96 -1.13%
Nickel (London) 21305.00 -315 -1.46%
Zinc (London) 2125.00 -25 -1.16%
RBA Cash Rate to be decreased by 25bp (Feb) (%) 75.00 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.

ends

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