IG Markets - Morning Thoughts

IG Markets - Morning Thoughts

In US trade, markets dramatically dropped following the close as JPMorgan shares traded 5% lower due to a surprise investment loss in their investment arm. Sentiment had somewhat improved earlier on in the absence of any nasty headlines out of Europe There are hopes that PASOK leader Venizelos will be able to forge a coalition with the New Democracy and Democratic Left, a set-up that would command a majority of 168 of 300 seats. This lifted sentiment as it would help Greece avoid a second election.

Among the major averages, the Dow Jones Industrial Average was up 0.2% at 12855. The S&P was 0.3% higher at 1358, while the NASDAQ shed a point to finish at 2934.

The modest bounce in risk assets saw copper, gold and oil halt their losing streaks. Metals did well to shrug off the disappointing data out of China, and posted modest gains. BHP’s ADR is pointing to a 0.8% advance to $34.88. The Aussie dollar staged a strong recovery through the Asian and European sessions, only to stall in US trade. AUD/USD is now back where it was at the beginning of yesterday’s Asian session, after trading as high as 1.01436, as participants continued to sell it on strength. ANZ Bank is expected to announce its interest rate decision today after having held off for over a week. The bank has broken rank with the RBA and now reviews its interest rates independently.

Ahead of the open, we are calling the Aussie market down 0.1% at 4291. This is mainly as a result of the post-market sell-off we saw in the US as the Dow came off 90 points after the close. However, strength in the resources might help support the index at the open. Investors will also be less pessimistic about Greece, and this might also help lift sentiment. There is plenty of event risk on the way with China CPI, M2 money supply, fixed asset investment, industrial production and retail sales due out. Locally, we do not have any economic data due out today.

Market Price at 6:30am AEST Change Since Australian Market Close Percentage Change
AUD/USD 1.0058 -0.0051 -0.50%
ASX (cash) 4291 -5 -0.11%
US DOW (cash) 12802 -59 -0.45%
US S&P (cash) 1350.6 -7.8 -0.57%
UK FTSE (cash) 5521 -24 -0.43%
German DAX (cash) 6470 -43 -0.66%
Japan 225 (cash) 9007 -3 -0.04%
Rio Tinto Plc (London) 31.50 0.23 0.73%
BHP Billiton Plc (London) 18.72 0.08 0.42%
BHP Billiton Ltd. ADR (US) (AUD) 34.88 0.26 0.75%
US Light Crude Oil (June) 96.45 -0.23 -0.24%
Gold (spot) 1593.5 -0.8 -0.05%
Aluminium (London) 2042 -14 -0.69%
Copper (London) 8120 -1 -0.01%
Nickel (London) 17179 -170 -0.98%
Zinc (London) 2092 5 0.22%

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

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