IG Markets - morning thoughts and opening prices

In US trade, markets retreated with Greece continuing to dominate headlines. Investors were exercising caution ahead of a key weekend for Greece, as worries escalated that efforts to keep the country from defaulting were falling apart. The session was largely risk off, with falls in commodities, equities and risk currencies.

Among the major averages, the Dow Jones Industrial Average was down 0.7% to close at 12801. The S&P shed 0.7% to finish at 1343, and the NASDAQ declined 0.8% to end at 2904.

After violent scenes in Athens on Friday evening, resignations from multiple politicians in defiance of the further austerity measures, plus an ultimatum from Prime Minister Mr Papademos that any cabinet members voting against the austerity would be fired, the Greek cabinet approved the EU/IMF bailout plan. The austerity measures include €300 million in pension cuts and a 22%reduction in the minimum wage to €560 a month. About 150,000 sector jobs would be cut in the next three years. The vote would partly clear the way for Greece to receive a second €130 billion bailout and finalise a voluntary restructuring of €200 billion of sovereign debt.

The Greek parliament will now vote on it today, with a pass widely expected. Some reports are also suggesting that the bailout cost has risen to €145 billion. We have seen risk currencies open higher this morning as optimism grows around the Greek vote. This might give some upside to the market after Friday’s weakness. Based on Saturday morning’s close for the futures, we are calling the Aussie market down 0.2% at 4235. JB Hi-fi reports today, and after the big downgrade in mid-December, today’s results are unlikely to have any major surprises. Leighton Holdings also reports after having provided guidance in mid-January. On the economic front, we have homes loans data due out at 11.30am. However, Greece will dominate headlines today and is likely to influence risk sentiment.

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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ENDS

BUDGET 2012:
Parliament Debate Live - Video Of Budget 2011
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BUDGET 2012 - FULL COVERAGE: Reports / Analysis - Press Kit - Reaction (from everybody) - Previews (from everybody) - Pre-Budget Announcements

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