IG Markets - morning thoughts and opening prices

IG Markets - morning thoughts and opening prices

In US trade, markets advanced on high hopes of a strong take-up of the ECB's 3-year LTRO operation. However, the gains were capped by mixed to weak US economic data. Expectations of a large take-up of the ECB offering were boosted by a nose-dive in the eurozone's banks’ demand for the ECB's unlimited one-week credit on Tuesday, as the banks gear up for Wednesday's 3-year offering.

Among the major averages, the Dow Jones Industrial Average was up 0.2% at 13005. The S&P was 0.3% higher at 1372 and the NASDAQ surged 0.7% to finish at 2987. The NASDAQ outperformed after Apple put in a stellar performance ahead of the launch of its new iPad.

It is encouraging to finally see US markets close above key levels (13,000 for the Dow and 1370 for the S&P). Investors will now be hoping the market can hold at those levels as they consider fresh longs. Risk assets were underpinned by hopes of a strong LTRO operation and this might support the underperforming Aussie market today. Unlike US markets, the Aussie market is way off its highs for the year. Crude prices continued to correct lower, which will be yet another positive for equities. Some analysts are now fearing the big build-up for the LTRO operation later today makes the event vulnerable to end up being a ‘buy the rumour, sell the fact’ affair.

Ahead of the open, we are calling the Aussie market up 0.3% at 4275. On the economic front, we have new home sales, retail sales, construction work done and private sector credit data. With such a full economic calendar, the Aussie dollar could be in for an interesting session. Reporting today, we have Worley Parsons and Harvey Norman. Reporting season is winding down now and we can expect to see a flood of earnings reports from some companies trying to release earnings before the deadline.

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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