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IG Markets - Morning Thoughts

IG Markets - Morning Thoughts

The only story town (read global markets) is the fiscal cliff. Heading into the last month of the year, the fiscal cliff is the topic that will dominate all others and will set the course for all asset classes heading into 2013.

Friday’s US session closed essentially flat with stocks finishing mixed in a day of lacklustre trading. True to form, the Democrats and Republicans were trading barbs, with each side trying to paint the other as the unreasonable villain in the ongoing negotiations. Republican House leader John Boehner, in a veiled swipe at the Democrats, said the country needed ’adult leadership‘ and the Republicans were ’almost nowhere‘ with regards to their discussions with the White House over the last fortnight.

Still, despite the antagonism, the prevailing view in the market is that some sort of deal will be struck prior to year-end, even if it is nothing more than a stop-gap measure that will buy some time for further vigorous debate in the first quarter of 2013.

In other news, US consumer spending in October slipped for the first time in five months, business activity in the mid-west (Chicago PMI) expanded for the first time since August, coming in at 50.4, while European markets closed near 17-month highs after the German parliament approved new aid measures for Greece, including a lower revise interest rate on its bailout funds.

Turning to the local market, the ASX 200 is set to start the month of December on the front foot with the benchmark index called to unwind approximately 19 points or 0.4% higher at 4525. Local sentiment is likely to be boosted by news over the weekend that Chinese manufacturing PMI hit a seven-month high coming in at 50.6, as well as a broadly higher base metals complex. BHP’s ADR is suggesting the local stock will open up about 15 cents or 0.4% at $34.54.

Also likely to influence local trade today is MI Inflation data and the monthly retail sales print which is expected to show growth for October of 0.4%. However, the big local story of the week is tomorrow’s RBA decision where it is now widely expected that the cash rate will be cut by 25 basis points to 3% - a timely boost to households as we head in to the all- important Christmas spending period.

Market Price at 8:00am AEST Change Since Australian Market Close Percentage Change
AUD/USD 1.0438 0.0009 0.09%
ASX (cash) 4525 19 0.42%
US DOW (cash) 13041 27 0.21%
US S&P (cash) 1419.4 2.9 0.20%
UK FTSE (cash) 5887 25 0.43%
German DAX (cash) 7434 46 0.63%
Japan 225 (cash) 9499 38 0.40%
Rio Tinto Plc (London) 30.93 0.03 0.11%
BHP Billiton Plc (London) 19.62 -0.08 -0.42%
BHP Billiton Ltd. ADR (US) (AUD) 34.51 0.12 0.35%
US Light Crude Oil (January) 88.94 1.22 1.39%
Gold (spot) 1714.80 -13.3 -0.77%
Aluminium (London) 2094.00 16 0.76%
Copper (London) 7995.00 63 0.80%
Nickel (London) 17650.00 455 2.65%
Zinc (London) 2046.00 18 0.89%
Iron Ore 115.6 -1.30 -1.11%


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.

www.igmarkets.com

ends


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