IG Markets - morning thoughts and opening prices

IG Markets - morning thoughts and opening prices

In US trade, there was cautious consolidation ahead of an expected resolution on major issues regarding Greece and ahead of the key US non-farm payroll data later today. Some encouragement came from better-than-expected US jobless claims data and relatively upbeat comments by Fed chairman Mr Bernanke. The Fed chief said he was seeing signs that some of the factors dampening US business investment were waning, noting in particular less uncertainty surrounding Europe's banking woes.

Among the major averages, the Dow Jones Industrial Average was down 0.1% closing at 12705. The S&P climbed 0.1% to finish at 1326, and the NASDAQ added 0.4% to end at 2860.

Key commodity prices fell on Thursday, despite the better US jobless claims data and Mr Bernanke’s comments, with copper falling over 1.0% and oil down 1.9%. This could see some of our local resource plays retreat after yesterday’s monster gains. News of the Xstrata and Glencore tie-up might help reduce the negative impact of the commodity weakness. BHP’s ADR is suggesting the stock will open 0.4% higher. The 2012 rally in gold continued as the precious metal rose for the third straight day and traded to a two-month high. As a result, gold companies are likely to remain in focus. The junior gold miners with low cost operations will continue to be in favour.

AUD/USD retreated from the major resistance window between 1.0750/65, as weaker commodity prices discouraged fresh buying. This could give some temporary relief to the currency-sensitive stocks. Looking at the leads from US trade, it seems we are in for a relatively quiet session. We are likely to see markets trade in tight ranges, with some position adjustment ahead of the US payroll data. Ahead of the open, we are calling the Aussie market up 0.1% at 4273.

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.

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ENDS

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