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IG Markets Morning Report

IG Markets Morning Report

Good morning,

On Wall Street overnight, US stocks continued their grind higher on light volumes, with the S&P 500 reaching its highest close since the Lehman Brothers bankruptcy in September 2008. Strong earnings reports from the likes of Adobe and Macy’s helped boost sentiment while M&A activity among the financials raised prospects for further corporate activity.

The technology-laden NASDAQ was the best performer, up 0.7% while the broad-based S&P 500 added 0.6% and the Dow Jones Industrial Average 0.5%.

Locally, the ASX 200 is called to open the session 0.2% firmer at 4782 following the positive overnight leads.

We should see some strength among financial names after the US financial sector was the best performer, up 1.7%. The sector was boosted by news that Toronto-Dominion Bank had agreed to by Chrysler Financial from private equity firm Cerberus Capital Management for 6.3%, sparking speculation there could be further M&A activity among the banks. Citigroup, Goldman Sachs, Bank of America, JP Morgan and Wells Fargo were all stronger by more than 0.6%.

Materials stocks are also likely to put in a good performance after the US basic materials sector was a strong performer, rising 1%. On the London Metals Exchange, base metal prices were mostly firmer while in normal equities trade, Rio Tinto and BHP Billiton added 2.6% and 2.9% respectively. Locally, BHP Billiton’s ADR is calling the Australian entity to open 0.5% higher at $45.64. Gold stocks should be fairly quiet after the precious metal futures had a pretty flat session to be trading around US$1384/oz level.

Elsewhere, we could see some strength among energy and industrial names after gains of 1% and 0.8% for the respective sectors in US trade. Crude Oil futures added 0.5% to be hovering around the US$89.80 level.

In summary, it looks like being another positive session for the local bourse despite the continued decline in trading volumes. In terms of economic data, the only report due for release is the MI Leading Index at 10.30am, which is unlikely to have any impact on the market or currencies.

In foreign exchange markets, the EURUSD continued its slide south as Moody’s unsurprisingly warned it may downgrade Portugal’s debt rating. The EURUSD hit a session low of 1.3073 before settling around the 1.31 level. Closer to home and the AUDUSD managed to climb against the greenback, once again testing the parity level before retreating. It hit an overnight high of 0.9992 before pulling back to be trading around the 0.9968 level.

Market Price at 8:00am AEST Change Since Australian Market Close Percentage Change
AUD/USD 0.9967 0.0003 0.03%
ASX (cash) 4782 11 0.22%
US DOW (cash) 11539 38 0.33%
US S&P (cash) 1255.0 5 0.40%
UK FTSE (cash) 5952 25 0.41%
German DAX (cash) 7082 37 0.53%
Japan 225 (cash) 10390 43 0.41%
Rio Tinto Plc (London) 45.37 1.15 2.60%
BHP Billiton Plc (London) 25.84 0.72 2.87%
BHP Billiton Ltd. ADR (US) (AUD) 45.64 0.22 0.49%
US Light Crude Oil (Feb) 89.79 0.40 0.45%
Gold (spot) 1385.4 -1.2 -0.09%
Aluminium (London) 2428 52 2.19%
Copper (London) 9365 128 1.39%
Nickel (London) 24699 -51 -0.21%
Zinc (London) 2330 18 0.78%
RBA Cash Rate to be raised by 25bp (Feb) (%) 9.00 0.00 0.00%

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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