Video | Agriculture | Confidence | Economy | Energy | Employment | Finance | Media | Property | RBNZ | Science | SOEs | Tax | Technology | Telecoms | Tourism | Transport | Search

 


IG Markets - Morning thoughts and opening prices

IG Markets - Morning thoughts and opening prices

Overnight, European and US markets turned negative for the first time this year. US markets finished the day particularly soft after the release of the Federal Reserve’s December minutes. The minutes show that members were ready to end ‘operation twist’ also known as QE3 in 2013. Views were mixed, however, as to when this would take effect was in question, with some stating that asset buying will continue at least until the end of 2013. Others believe it would be beneficial to slow and even stop purchasing bonds by the middle of the year, citing financial stability as their main concern. This saw all US indices retreat immediately with the S&P 500 lower by 0.27% to finish at 1459 points after a positive start. With the index reaching its highest level since September on Thursday after passing the budget bill, the Fed minutes put a dampener on economic data from Moody’s that showed private sector jobs grew in December and well exceeded expectations. This data is seen as a precursor to the more closely watched government employment report which is released tonight. The report also showed that the US unemployment rate remained steady at 7.7% - the lowest level in four and half years. Retailers also reported their December sales last night and showed results were mixed, as investors waited and watched consumer sentiment and spending during the holiday season. One positive to come out of the results were store sales, which rose 4.5% above the forecasted 3.3%.

European stocks also declined or the first time this year after reaching a 17-month high on Thursday. With the euphoria of the US budget bill fading, investors are now turning their attention to the size of the US fiscal deficit and the March deadline. Having now witnessed both the 2011 ‘debt ceiling’ and 2012 ‘fiscal cliff’ negotiations, investors are predicting another nail-biting finish in the House and the Senate come March. This saw both the DAX and the CAC retreat 0.29% and 0.2% to 7756 and 3721 points respectively.

Currencies also reacted to the Fed minutes and saw the dollar extend its gains. The dollar was already recovering loses from the budgetary news on Wednesday with the additional new wire increasing its rate of recovery. This saw the euro fall to $1.3072 from $1.3177. The yen continued its fall against the dollar to ¥87.28 on the back of the Fed minutes and has fallen further after statements by Japanese Prime Minister Shinzo Abe who reiterated his commitment to weakening the currency. The Aussie dollar was stronger in early trade as the risk currency broke back above $1.05 for a short while. However, it fell away sharply on the release of Fed minutes and is now back below $1.05 to be $1.0463.

Moving to our market and with the ASX 200 hitting its highest point since May 2011 closing 4740 points yesterday, it is expected to be flat today as investors look to consolidate their positions. We are calling the ASX down around 0.11% to 4735. With both raw materials and spot commodity also falling overnight, BHP’s ADR is matching down 1.24% to $37.68 after finishing at $38.15 - its highest level since February last year. As we head into the first weekend of the year, trading will be low today with no firm leads from global markets.

MarketPrice at 8:00am AESTChange Since Australian Market ClosePercentage Change
AUD/USD1.0464-0.0024 -0.22%
ASX (cash)4736-5 -0.11%
US DOW (cash)13360-6 -0.05%
US S&P (cash)1454.6-2.3 -0.15%
UK FTSE (cash)60391 0.01%
German DAX (cash)7740-30 -0.38%
Japan 225 (cash)10735-5 -0.05%
Rio Tinto Plc (London)36.58-0.33 -0.89%
BHP Billiton Plc (London)22.00-0.09 -0.41%
BHP Billiton Ltd. ADR (US) (AUD)37.68-0.47 -1.24%
US Light Crude Oil (February)92.66-0.23 -0.25%
Gold (spot)1664.05-24.2 -1.43%
Aluminium (London)2116-45 -2.08%
Copper (London)8164-45 -0.55%
Nickel (London)17500-205 -1.16%
Zinc (London)2088-52 -2.43%
Iron Ore149.84.9 3.38%

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.

www.igmarkets.com

ENDS

© Scoop Media

 
 
 
 
 
Business Headlines | Sci-Tech Headlines

 

Finance: Major Campaign To End "Gross Overtaxation Of Savings"

The campaign – which includes a special web site through which New Zealanders can e-mail their own and other MPs and party leaders – is backed by Age Concern, Consumer NZ, the Financial Services Council and the Taxpayers’ Union. More>>

ALSO:

Scoop Business: Leighton-Led WGP To Build, Manage Transmission Gully

The Wellington Gateway Partnership, led by a unit of ASX-listed Leighton Holdings, has won the $1 billion contract to build the Transmission Gully road north of Wellington. More>>

ALSO:

Gareth Morgan: The Government’s Fresh Water Policy – Revisited

Fresh water quality is the latest area to be in the sights of Gareth Morgan and his research organisation The Morgan Foundation... They found that the fresh water policy was a bit murkier than the Environment Minister let on. More>>

ALSO:

Interest Rates: RBNZ Hikes OCR To 3.5%, ‘Period Of Assessment’ Now Needed

Reserve Bank governor Graeme Wheeler raised the official cash rate as expected, while signalling a pause in rate hikes to assess the impact of moves so far this year. The kiwi dollar sank after Wheeler said its strength was “unjustified” and that the currency could have “a significant fall.” More>>

ALSO:

Fonterra: Canpac Site 'Resize' To Focus More On Paediatrics

Fonterra is looking at realigning its packing operations at Canpac, in the Waikato, to focus more on paediatric nutritionals... The proposed changes could mean around 110 roles may not be required at the site which currently employs 330. More>>

ALSO:

Scoop Business: Postie Plus Brand Gets 2nd Chance With Well-Funded Pepkor

The Postie Plus brand is getting a new lease of life after South Africa’s Pepkor bought the failed retailer’s assets out of administration and said it will use its purchasing power to reduce costs of stock and fatten margins. More>>

ALSO:

Get More From Scoop

 
 
Computer Power Plus

Standards New Zealand

Standards New Zealand
 
 
 
 
 
 
 
 
Business
Search Scoop  
 
 
Powered by Vodafone
NZ independent news