IG Markets - morning thoughts and opening prices

IG Markets - morning thoughts and opening prices

In US trade, markets were sold off on growth concerns about Europe and heightened uncertainty ahead of Thursday's deadline for Greek bondholders to accept the debt swap deal. Although eurozone fourth quarter GDP came in as expected, the breakdown stoked future growth concerns.

Among the major averages, the Dow Jones Industrial Average was down 1.6% at 12759. The S&P was 1.5% lower at 1343 and the NASDAQ declined 1.4% to finish at 2910. This was the S&P’s biggest one-day fall since 24 November last year.

Risk assets were hit hard with big falls in commodities and risk currencies. As a result, we expect to see cyclical stocks struggle at the open today. With heightened risk aversion and intensifying global growth fears, sectors leveraged to global growth will struggle. BHP’s ADR is pointing to a 1.4% drop at the open. The Aussie dollar fell significantly against the US dollar and the yen as commodity currencies took a massive hit. There is now a double top on the AUD/USD chart with neckline support at 1.0597 broken. This could trigger a move down to 1.04 and below.

Rumours that a slack participation rate by private investors in the Greek bond swap might force Athens to extend the deadline beyond Thursday are likely to keep investors at bay The last thing markets want to see is uncertainty. However, after months of negotiation, European leaders are unlikely to let this happen. Ahead of the open, we are calling the Aussie market down about 1.3% at 4151. On the economic calendar, we have quarterly GDP figures due out at 11.30am with a 0.7% rise expected.

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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