IG Markets - Morning thoughts and opening prices

Good morning,

In US trade, markets retreated from the previous day’s gains, as Spain’s problems resurfaced following a spike in bad loans. There was some caution ahead of today's Spanish bond auctions, particularly in the wake of data showing that non-performing loans as a proportion of total lending in Spain jumped in February. Investors also reacted to some disappointing earnings reports from Intel and IBM.

Among the major averages, the Dow Jones Industrial Average was down 0.6% at 13033. The S&P was 0.4% lower at 1385, while the NASDAQ shed 0.4% to finish at 3031.

The commodity/risk currencies struggled as risk appetite waned. Oil dropped around 1.5% following a jump in inventories, while gold and copper were around half a percent weaker. However, we expect to see some follow-through buying in the local resource names after recent production reports and broker upgrades. BHP’s ADR is pointing to a 0.2% gain at the open to $35.18. We could see the energy sector underperform after oil struggled in US trade. Telstra will be one to watch after it released an investor update this morning confirming FY12 guidance and dividend.

Ahead of the open, we are calling the Aussie market down 0.1% at 4346. We could see yesterday’s positive momentum propel the market in early trade. On the local economic front, we have NAB quarterly business confidence data due out today. However, this is not a big market mover and focus is likely to remain on the big miners’ production reports, with Fortescue Metals coming to the fore today. Prime Minister Julia Gillard is reportedly preparing to make a speech that will ramp up pressure on the RBA to cut rates. However, this is unlikely to result in a shift in the RBA’s stance, as it is supposed to be an independent body. Elsewhere in the region, it is a fairly big day for Japan with trade balance figures and comments from BoJ Governor Shirakawa due out.

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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