IG Markets - Morning thoughts and opening prices

Good morning,

In US trade on Friday, markets declined after disappointing economic numbers out of China led to global growth fears and European sovereign debt jitters resurfaced. European stock markets tumbled, led by losses in the banking sector and commodity stocks

Among the major averages, the Dow Jones Industrial Average was down 1.1% at 12850. The S&P was 1.3% lower at 1370, while the NASDAQ shed 1.5% to finish at 3011.

Equities, commodities, treasury yields and risk currencies fell, while the US dollar rose. BHP’s ADR pointing to a 1.5% drop at the open to $33.95. The resources are in for a tough start to the week after commodities slumped significantly on Friday. However, there could be some support from the PBOC’s move to widen the Yuan trading band from 0.50% to 1.0%. This move shows a sign of confidence in the economy by Chinese officials. The weaker Aussie dollar might also support some sectors, particularly in the defensive healthcare space. Financials are likely to come under pressure after their European peers struggled on Friday.

Ahead of the open, we are calling the Aussie market down 0.7% at 4293. On the local economic front, we have no major data to look out for. We are likely to see some focus on ANZ bank after it raised its variable rate by six basis points in yet another out-of-cycle rates move. With pressure already mounting on the RBA to act next month, the effective margin of a cut is swiftly closing. Some analysts will argue the RBA now has to cut by an even bigger amount to accommodate for the banks’ actions.

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.

www.igmarkets.com.au

ENDS

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