IG Markets - morning thoughts and opening prices

IG Markets - morning thoughts and opening prices

With US markets closed last night, there were not many leads to work off. European markets were relatively weaker after erasing early gains. The widening of Spanish debt yields due to concerns over the Spanish banking sector kept some investors at bay. The Spanish bank crisis seems to have clouded some of the positive developments from the latest Greece polls. A high level of unemployment in Spain certainly amplifies the threat of a debt blowout. Reports that Greek banks had obtained the promised EUR 18 billion in fresh recapitalization funds and that Greece still has access to a residual cash reserve to help make ends meet in the near future failed to ignite markets. Risk currencies held up fairly well in the face of an escalating Spanish bank crisis. The Aussie dollar has remained steady against the greenback, quietly consolidating at around 0.984, where it seems to be forming a base.

Ahead of the open, we are calling the Aussie market down 0.5% at 4047, after European markets erased early gains. However, commodities were generally higher and this might lift some of the resource stocks today. The metals were supported by speculation that China is close to announcing more monetary and fiscal stimulus to help resuscitate the economy. This news might help support equities and other risk assets in the Asian region today. On the economic front, we have HIA new home sales data due out sometime today. Elsewhere in the region, there is quite a bit of data due out in Japan, with household spending, unemployment rate and retail sales to look out for.

As US markets did not trade, we do not have any ADRs to work off this morning. Elsewhere in the mining space, Aquarius Platinum might be finally in for a recovery after its Johannesburg-listed shares rose the most since July 2010. AQP confirmed its Mimosa Mine will not be affected by the regulatory changes in Zimbabwe. Lynas Corp will also be one to watch after a big move through $1 yesterday saw it break a downtrend resistance line. AGL Energy is back online today after having gone into a trading halt last week ahead of proposed 1-for-6 rights offer priced at $11.60 per share. The banks will be closely monitored today as the threat of the European crisis continues to linger.

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.

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