IG - Morning Thoughts And Opening Prices December 30, 2014
Greece heading to elections
The main headline from overnight trade was Greece’s failure to elect presidential nominee Stavros Dimas in its final
attempt. After two failed attempts, yesterday was parliament’s last chance to elect him as president before being forced
into an early election. Having failed yet again, the country will be headed back to the polls as early as January 25. An
election puts all sorts of doubt on the future of the bailout agreement given anti-austerity party Syriza is currently
leading the polls. While Greek equities slumped, the reaction in the euro and the rest of the region wasn’t quite as
bad. Potentially markets had already priced this in but I would still remain cautious around Greece. EUR/USD printed a
new low of $1.2143 and remains quite vulnerable at the moment. This was the pair’s lowest level since July 2012. That
same month the pair traded down to $1.2043 and that’s potentially a near term target for the pair.
Greenback remains resilient
Apart from Greece which slumped significantly, markets were generally choppy elsewhere with USD strength remaining a key
theme. In fact, the AUD was one of the few currencies that managed to regain some ground against the greenback and that
was mainly due to the strength that was coming through from China yesterday. AUD/USD traded as high as $0.8163 but has
since started drifting again and I suspect it’ll continue to knock on the $0.8100 support. Meanwhile USD/JPY is nudging
higher, back towards ¥121.00, and is retesting last week’s highs at the moment. The Nikkei was a surprise underperformer
yesterday and could be in for a bounce today.
Flat start for ASX 200
Ahead of the open we are calling the ASX 200 a touch firmer at 5480. As of yesterday’s close, the market is up 2.35 for
the calendar year. We saw incredible momentum yesterday and it’ll be interesting to see if this can continue given the
uncertainty presented by Greece. China was a key driver of the gains yesterday and given it reversed the majority of its
gains, this could present some challenges for the region. The bounce in iron ore prices might help the materials names
continue their strength from yesterday. However, if China’s rally stalls and if this impacts iron ore futures then it
won’t be long before we see this reversed. Oil’s brief recovery failed to keep going and this will put energy names
under pressure. In the banking space, CBA traded above $86 yesterday and is at fresh record highs. Investors will feel
uneasy about pushing the stock much higher from these levels, perhaps buying the dips will be a preferred strategy.
Asian markets opening call
Price at 8:00am AEDTChange from the Offical market closePercentage Change
Australia 200 cash (ASX 200) 5,487.70 14 0.25%
Japan 225 (Nikkei) 17,734.00 113 0.64%
Hong Kong HS 50 cash (Hang Seng) 23,803.00 30 0.13%
China H-shares cash 12,050.20 30 0.25%
Singapore Blue Chip cash (MSCI Singapore) 381.50 0 0.12%
US and Europe Market CallsPrice at 8:00am AEDTChange Since Australian Market ClosePercentage Change
WALL STREET (cash) (Dow) 18,060.00 -27 -0.15%
US 500 (cash) (S) 2,092.05 2 0.08%
UK FTSE (cash) 6,616.60 -10 -0.15%
German DAX (cash) 9,927.60 -13 -0.13%
Futures MarketsPrice at 8:00am AEDTChange Since Australian Market ClosePercentage Change
Dow Jones Futures (December) 18,062.00 -26.00 -0.14%
S Futures (December) 2,087.00 1.00 0.05%
ASX SPI Futures (December) 5,448.00 -21.00 -0.38%
NKY 225 Futures (December) 17,828.00 0.00 0.00%
Key inputs for the upcoming Australian trading session (Change are from 16:00 AEDT)Price at 8:00am AEDTChange Since Australian Market ClosePercentage Change
AUD/USD $0.8132 0.0004 0.05%
USD/JPY ¥120.660 0.160 0.13%
Rio Tinto Plc (London) £29.75 0.88 3.03%
BHP Billiton Plc (London) £14.05 0.36 2.63%
BHP Billiton Ltd. ADR (US) (AUD) $29.62 -0.07 -0.22%
Gold (spot) $1,183.34 -11.26 -0.94%
Brent Crude (January) $58.00 -2.00 -3.33%
Aluminium (London) 1863.5 -3.25 -0.17%
Copper (London) 6255 -57.25 -0.91%
Nickel (London) 15054 -239.00 -1.56%
Zinc (London) 2139 -20.75 -0.96%
Iron Ore (62%Fe Qingdao) $68.71 1.37 2.03%
IG 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.
STAN SHAMU