IG Markets - Morning Thoughts

IG Markets - Morning Thoughts

The risk rally triggered by the Greek debt deal swiftly faded as market participants switched their focus to fiscal cliff concerns. European equities managed mild gains but were well off their highs as the positive sentiment from the Greek deal waned. US equities actually got off to a good start with some positive economic data supporting. Core durable goods orders and consumer confidence data came in better than expected, helping to shore up US equities early. However, comments by a US Senator suggesting there hasn’t been much progress in fiscal cliff negotiations dampened sentiment and weighed on US equities. With the Greece issue behind us for now, focus will be pinned on the fiscal cliff going into the end of the year. Risk currencies retreated from their highs in the Asian session with AUD/USD dropping back into the 1.044 support and EUR/USD was back in the low 1.29s after having traded at 1.3.

Ahead of the open, we are calling the Aussie market down 0.3% at 4442. The ASX 200 traded at a high of 4461.7 yesterday and that will be the level to watch in the near term. Yesterday we highlighted that the index will need to churn through resistance at 4432 (55-day moving average) and 4461 (the downtrend drawn from the October 18 high). The 4432 level will now be near-term support should the index extend its losses beyond our opening call. It is another fairly quiet day on the local economic front with construction work done being the only release on the calendar.

On a stock level, we expect to see a softer start for BHP Billiton, with its ADR pointing to a 1% fall to $33.87. It was a tough night for key commodities as the US dollar gained some ground and weighed. As a result we are likely to see resource names give up some of yesterday’s gains early. CSL Limited will be in focus again today after yesterday’s monster rally on the back of lifting its profit guidance for FY13. We are likely to continue hearing brokers react positively to the upgrade. Cabcharge has an annual general meeting today and it might deserve some attention after the recent surcharging standard changes by the RBA.

Market Price at 8:00am AEST Change Since Australian Market Close Percentage Change
AUD/USD 1.0442 -0.0040 -0.39%
ASX (cash) 4442 -15 -0.33%
US DOW (cash) 12883 -100 -0.77%
US S&P (cash) 1401.6 -9.0 -0.64%
UK FTSE (cash) 5791 -30 -0.51%
German DAX (cash) 7322 -35 -0.47%
Japan 225 (cash) 9357 -86 -0.91%
Rio Tinto Plc (London) 29.80 -0.14 -0.48%
BHP Billiton Plc (London) 19.44 -0.03 -0.14%
BHP Billiton Ltd. ADR (US) (AUD) 33.87 -0.33 -0.97%
US Light Crude Oil (January) 87.27 -0.76 -0.86%
Gold (spot) 1741.6 -8.4 -0.48%
Aluminium (London) 2006.5 9 0.46%
Copper (London) 7793.375 5 0.06%
Nickel (London) 16895 225 1.35%
Zinc (London) 2206.875 15 0.69%
Iron Ore 117.9 -0.30 -0.25%

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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