IG Markets - Morning thoughts and opening prices

Good morning,

In US trade, markets were broadly risk-off, as eurozone debt concerns re-surfaced and the possibility of further quantitative easing by the Fed faded. Eurozone sovereign debt concerns increased following a very weak Spanish debt auction.

Among the major averages, the Dow Jones Industrial Average was down 1% at 13075. The S&P was 1% lower at 1399, while the NASDAQ declined 1.5% to finish at 3068.

Commodity markets were hammered with some steep falls in key commodities like copper and gold. The precious metal printed its lowest price since 10 January 2012 as it continued its post-FOMC minute slide. As a result, we expect gold and copper miners to underperform their mining peers today. Among the commodity currencies, the Aussie dollar continued to struggle after falling as low as 1.0243, and is currently trading at around 1.027. We will see some key support levels tested today with mining giant BHP’s ADR is pointing to a 1.9% drop at the open to $34.07.

Ahead of the open, we are calling the Aussie market down 0.7% at 4303. This sees it open in the key support zone which was resistance for most of this year. We could see some investors continue to buy the dips here. Chinese markets return to trade today after having been on holiday since Monday. They will have a chance to react to the PMI numbers from the weekend for the first time today. On the economic front, we have nothing to look out for today. With a long weekend ahead, we wouldn’t be surprised to see some quiet consolidation after the open, with relatively thin volumes being traded.

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.

Please contact IG Markets if you require market commentary or the latest dealing price.

Kind regards,
Stan Shamu
Market Strategist
IG Markets
www.igmarkets.com.au

ENDS

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