IG Markets - Morning Thoughts

IG Markets - Morning Thoughts

Risk assets struggled through European and most of US trade only to experience a big turnaround into the close of the US session. Once again, corporate earnings were in focus in US trade and set the negative tone through most of the session. There were disappointing earnings from the likes of Freeport-McMoran, SunTrust banks, Monster Beverage and Coach. Caterpillar shares rose despite still experiencing slow sales growth, while Peabody Energy jumped 11%. The turnaround has mainly been attributed to a technical move as the S&P reversed after testing important pivot support in the 1422 region. This level was the April high for the S&P. Looking at the risk currencies, there was limited movement with AUD/USD and EUR/USD maintaining tight ranges in the absence of fresh macro developments.

Ahead of the open, we are calling the Aussie market up 0.1% at 4547. The positive momentum into the close of US trade is likely to carry through to the local market open. AUD/USD continues to find support in the 1.03 region and seems to be fairly sidelined at the moment. On the economic front, we have the CB leading index today. Elsewhere, we have another US presidential debate at around midday local time. This could be a source of volatility for the US dollar. Japan will be in focus after the yen lost significant ground through European and US trade. USD/JPY broke above 79.40 and came just shy of 80 early in the Asian session. This might help the Nikkei outperform the region today. We are currently calling the Nikkei up 0.8% at 9077.

On a stock level, we expect a mildly firmer start for BHP Billiton with its ADR suggesting the stock will rise 0.2% to $34.76. Iron ore climbed 1.9% to $117.5 and this will be positive for sentiment after yesterday’s falls in the iron ore space. Ten Network will be in focus yet again today with Champ reported to be back in play. The AFR is reporting that CHAMP is offering $110 million for Eye Corp, 24% below the original bid price. Investors will continue to monitor the Graincorp (GNC) takeover. UBS has upgraded the company to a Buy with a $13 price target. There has been talk that GNC will not agree to a takeover for less than $13.

Market Price at 7:30am AEST Change Since Australian Market Close Percentage Change
AUD/USD 1.0327 -0.0001 0.00%
ASX (cash) 4547 6 0.14%
US DOW (cash) 13369 0 0.00%
US S&P (cash) 1436.4 1.0 0.07%
UK FTSE (cash) 5907 -9 -0.16%
German DAX (cash) 7365 -13 -0.18%
Japan 225 (cash) 9077 67 0.75%
Rio Tinto Plc (London) 31.93 -0.08 -0.26%
BHP Billiton Plc (London) 20.30 -0.04 -0.21%
BHP Billiton Ltd. ADR (US) (AUD) 34.76 0.06 0.17%
US Light Crude Oil (December) 89.14 -1.78 -1.96%
Gold (spot) 1728.5 2.4 0.14%
Aluminium (London) 1965 -5 -0.25%
Copper (London) 7944 -71 -0.89%
Nickel (London) 16623 -327 -1.93%
Zinc (London) 1856 -29 -1.54%
Iron Ore 117.5 2.20 1.91%

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.

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