IG Markets - Morning Thoughts
IG Markets - Morning Thoughts
Risk assets were mixed on Friday with US equities getting a lift from another round of positive economic data, while Greece concerns weighed on European equities. Greece remains in a bad place at the moment, with some saying it could run out of funding within weeks. Apart from Europe, the rest of the world seems to be in a better place with economic releases from the US and China showing strong signs of improvement. Consumer sentiment data in the US came in well above expectations and lifted risk assets in US trade. China data from the weekend showed a big jump in the trade surplus, with exports rising at the fastest pace in five months. AUD/USD came off lows at around 1.036 and went on to retest 1.04. However, EUR/USD was capped by Greece fears but has managed to hold on to 1.27.
Ahead of the open, we are calling the Aussie market relatively flat at 4457. AUD/USD has gotten a good start to the week and gapped higher from Saturday’s close in response to China’s data releases. Positive China data is likely to give risk a kicker this morning and we could see cyclical names get off to a strong start. On the local economic front, we have home loans data and NAB business confidence data due out at 11.30am. However, this is likely to be a sideshow to another Chinese data dump this week, with the M2 money supply and new loans data due at some stage over the next couple of days. Elsewhere in the region, there is plenty of data out of Japan with GDP, tertiary industry activity, machine orders and a speech by BoJ Governor Shirakawa all on the calendar. This is likely to result in a big day for regional currencies, with some key levels being tested.
On a stock level, we expect to see a mildly softer start for BHP Billiton, with its ADR pointing to a 0.6% fall to $34.26. Commodities were mixed with some strong gains for oil, while iron ore edged higher and extended its gains above US$120. This will put the local energy names firmly in focus, while confidence will continue to return to the iron ore names. Lynas shares will be one to watch as the stock is set to return to trade after a favourable ruling on its operating licenses. The company is also looking to raise $200 million to fund the completion of its processing facility in Malaysia. We also have Incitec Pivot and Orica reporting today.
Market Price at 9:00am AEST Change Since
Australian Market Close Percentage
AUD/USD 1.0395 -0.0027 -0.25%
ASX (cash) 4457 -5 -0.11%
US DOW (cash) 12812 -54 -0.42%
US S&P (cash) 1379.7 -4.6 -0.33%
UK FTSE (cash) 5764 -10 -0.18%
German DAX (cash) 7159 -60 -0.84%
Japan 225 (cash) 8740 -34 -0.38%
Rio Tinto Plc (London) 30.99 0.15 0.48%
BHP Billiton Plc (London) 19.52 -0.01 -0.05%
BHP Billiton Ltd. ADR (US) (AUD) 34.26 -0.20 -0.58%
US Light Crude Oil (December) 86.07 0.66 0.77%
Gold (spot) 1731.3 -3.6 -0.21%
Aluminium (London) 1921 -9 -0.46%
Copper (London) 7570 -120 -1.56%
Nickel (London) 15950 -282 -1.73%
Zinc (London) 2199 -18 -0.80%
Iron Ore 122.1 0.70 0.58%
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