IG Markets - Morning Prices August 21

Risk assets were relatively flat through European and US trade on a day of limited data releases. Despite the relative calm in markets, there was some movement in the euro as it came under selling pressure early in the US session after the ECB refuted the Der Spiegel report that the Central Bank plans to set a cap on sovereign yields. However, the reports were later confirmed by Jorg Asmussen, who is a powerful German member of the ECB’s executive board. The Spanish 10-year yield dropped 16 basis points to 6.2% and the euro squeezed higher, as risk-sentiment improved. Additionally on the European front, investors are awaiting further guidance on Greece's bailout terms.

Ahead of the open, we are calling the Aussie market flat at 4364. Earnings reports are likely to be the main point of focus again today along with the high-yield plays. Should the market manage to clear yesterday’s high of 4375, which is now near-term resistance, the bulls will then be eyeing the 4400 psychological resistance ahead of May’s high of 4448.5. On the local economic calendar, the RBA minutes are due today. Given that the Central Bank in its August meeting noted the growth outlook to be ‘close to trend’, the inflation outlook ‘consistent with the target’ and the cash rate appropriate at 3.5%, the minutes are unlikely to give little new information. AUD/USD remains range-bound and investors will be eyeing any change in tone or wording in the minutes, which seems highly unlikely at the moment.

On a stock level, we expect a weaker start for BHP Billiton, with its ADR pointing to a 0.2% drop to $33.10. Reporting today we have Amcor, Consolidated Media, Monadelphous Group and Oil Search. Amcor seems to have slightly missed expectations with its full-year net income coming in at $412.6 million versus estimates of $466.5 million hurt by a stronger Aussie dollar. Its final dividend of 17 cents was also slightly below consensus of 19 cents. Monadelphous Group’s seem to have beat expectations with earnings coming in at $137.3 million versus consensus of $130.7 million. Its final dividend of 75 cents beat consensus of 58 cents per share. Bendigo & Adelaide Bank and Macmahon Holdings have both been cut to neutral (from buy) by Nomura after the stocks reported yesterday.

Market Price at 6:30am AEST Change Since Australian Market Close Percentage Change
AUD/USD 1.0448 -0.0004 -0.03%
ASX (cash) 4364 -0 0.00%
US DOW (cash) 13255 -19 -0.14%
US S&P (cash) 1418.9 -0.6 -0.04%
UK FTSE (cash) 5838 -19 -0.33%
German DAX (cash) 7036 -15 -0.21%
Japan 225 (cash) 9186 15 0.16%
Rio Tinto Plc (London) 30.00 -0.40 -1.30%
BHP Billiton Plc (London) 19.52 -0.09 -0.45%
BHP Billiton Ltd. ADR (US) (AUD) 33.10 0.07 0.20%
US Light Crude Oil (October) 96.21 -0.53 -0.54%
Gold (spot) 1620.8 1.3 0.08%
Aluminium (London) 1838 -12 -0.67%
Copper (London) 7449 -53 -0.71%
Nickel (London) 15551 35 0.22%
Zinc (London) 1900 20 1.07%

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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