IG Markets - morning thoughts and opening prices

IG Markets - morning thoughts and opening prices

In US trade, markets enjoyed a positive reversal of investor risk appetite, following reports that the ECB will complete a Greek bond swap deal with eurozone national central banks over the weekend. Risk appetite was given a further boost by better-than-expected US jobless claims data and stronger-than-expected Philly Fed manufacturing data.

Among the major averages, the Dow Jones Industrial Average was up 1% to close at 12904. The S&P was 1.1% higher at 1358 and the NASDAQ climbed 1.5% to finish at 2960. A fall in the US dollar added more fuel to a Wall Street rally that was kick started by the very encouraging US jobless claims. AUD/USD fell as low as 1.0646 during the London session before reversing to as high as 1.0774 during the US afternoon session when ‘risk-on’ dominated trading markets.

The materials sector was the biggest drag on the market yesterday, and it might be in for a recovery today after commodity prices were given a lift by the rise in investor risk appetite and the fall in the US dollar. Yesterday we also pointed out that BHP Billiton is approaching a key support level, which could prompt a strong recovery. BHP’s ADR is pointing to a 1.3% gain at the open.

Ahead of the open, we are calling the Aussie market up 0.8% at 4215. ANZ Bank will be in focus after posting a $1.48 billion cash profit for the December quarter. The result was ahead of analysts’ estimates of around $1.44 billion. We are likely to continue getting some reactions to the recent reports from the brokers today. Already, we have seen broker downgrades for AMP, QRN and AWC so far this morning. This could influence trading for a number of stocks. Some of the reports to look out for today include Santos, Sims Metal and Billabong. On the economic front, there is no major data due out today.

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

ENDS

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