IG Markets - Morning Prices July 10

Overnight, major European and US indices experienced another session of small to modest losses as investors continued to worry about the global growth outlook. While European financial issues are now almost an ‘accepted norm’ and imbedded within investors’ psyche, the sluggish US economy and escalating concerns over China’s growth trajectory are adding to the market’s myriad of woes heading into the second half of the year.

Today the local market is called to open approximately 10 points or 0.2% higher at 4128. The small gain can be attributed to the fact that yesterday’s closing price was factoring in a weaker US session than what actually eventuated. US markets also rebounded during their last hour of trade, helping push futures higher.

Also likely to benefit our market today was a slightly weaker USD. While the dollar index still remains above 83, the dollar did weaken marginally offering some respite across the base metals complex which has been hard hit in recent day on global growth fears. BHP’s ADR is suggesting the local stock will open 0.1% to the upside.

Yesterday it was China’s inflation that was in focus. Today it is China’s trade balance data that will captivate the market. Investors will be looking for a trade surplus of approximately $22 billion and hoping for signs of resilience across both its imports and exports. The breakdown will be telling of China’s current growth profile. A weak export number will fuel concerns that Europe’s recession is having a marked effect, while the import number will be a key influence of sentiment toward commodity prices – does China still have a voracious appetite for our commodities? This number will no doubt be an influence for our major miners. The trade balance data is also likely to see an upwards or downwards recalibration of Friday’s GDP estimates.

Market Price at 6:30am AEST Change Since Australian Market Close Percentage Change
AUD/USD 1.0208 0.0024 0.24%
ASX (cash) 4135 16 0.39%
US DOW (cash) 12751 -5 -0.04%
US S&P (cash) 1353.4 2.6 0.19%
UK FTSE (cash) 5653 -13 -0.23%
German DAX (cash) 6414 7 0.11%
Japan 225 (cash) 8920 23 0.26%
Rio Tinto Plc (London) 30.33 -0.36 -1.16%
BHP Billiton Plc (London) 18.24 -0.19 -1.03%
BHP Billiton Ltd. ADR (US) (AUD) 31.51 0.03 0.11%
US Light Crude Oil (August) 85.71 1.02 1.20%
Gold (spot) 1587.8 5.5 0.35%
Aluminium (London) 1927.125 29 1.53%
Copper (London) 7568.5 18 0.24%
Nickel (London) 16380 61 0.37%
Zinc (London) 1880.25 19 1.01%

www.igmarkets.com.au

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