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IG - Morning Thoughts And Opening Prices

IG - Morning Thoughts And Opening Prices
Good morning,

Risk assets were mixed as market participants exercised some caution ahead of a decision on Greece. The headlines are very predictable at the moment, with any gains or losses being attributed to Greece and/or fiscal cliff talks. However, after a big move higher last week, markets just seem to be in a holding pattern as they await fresh catalysts. Eurogroup finance ministers are currently in meeting as they look to reach an agreement on Greece which would eventually lead to them receiving their next tranche of aid. Of course having failed to reach an agreement last week, there is always a chance that some pieces of the negotiation won’t fall into place and further stall a decision. European equities lost ground, while US equities were mixed. Risk currencies were mostly sidelined in tight ranges with a lack of fresh drivers to significantly shift sentiment in either direction. AUD/USD found support at around 1.044 and is now trading at the top end of its range near 1.047. The pound was in focus, but remained little changed after current BoC Governor Mark Carney was named as the next Governor of the BoE.

Ahead of the open, we are calling the Aussie market flat at 4423. The ASX 200 looks resilient in the face of a negative US trade. Of course we underperformed in a big way last week, but that generally will happen when there is a big risk-on trend. As we highlighted yesterday, a close above 4428 (38.2% retracement of the sell-off from 4581 to 4334) would suggest the bulls are in control and higher levels could be on the cards. Above here the index will need to churn through resistance at 4432 (55-day moving average) and 4461 (the downtrend drawn from the October 18 high). For a ‘Santa Claus’ rally to take hold, we will need to see these levels breached. Once again, there is nothing major on the local economic calendar and therefore investors will continue to focus on the developments on the global macroeconomic front.

BHP Billiton looks like it will open unchanged at $34.02 based on its ADR. Commodities were mixed and this makes it difficult to determine which direction the resource names will swing at the open. CSL Limited will be in focus today after lifting its profit guidance for FY13. CSL was expecting FY13 net profit after tax to grow by 12% and it now expects this to grow by 20%. The upgrade has been mainly attributed to the performance of CSL Behring and better-than-expected royalty income from sales of Gardasil. There are a few annual general meetings on today with Harvey Norman and Resolute Mining probably being the main ones to keep an eye on.

MarketPrice at 8:00am AESTChange Since Australian Market ClosePercentage Change
AUD/USD1.04650.0007 0.06%
ASX (cash)4423-1 -0.02%
US DOW (cash)12953-6 -0.04%
US S&P (cash)1406.11.3 0.09%
UK FTSE (cash)5802-9 -0.15%
German DAX (cash)731116 0.22%
Japan 225 (cash)9363-69 -0.73%
Rio Tinto Plc (London)29.93-0.13 -0.44%
BHP Billiton Plc (London)19.460.01 0.03%
BHP Billiton Ltd. ADR (US) (AUD)34.020.01 0.03%
US Light Crude Oil (January)87.74-0.23 -0.26%
Gold (spot)1749.1-2.2 -0.13%
Aluminium (London)1993.875100.52%
Copper (London)7786160.20%
Nickel (London)16568-128-0.77%
Zinc (London)2184-25-1.13%
Iron Ore118.2-0.70-0.59%

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.

Market Strategist


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