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

 


IG - Morning Thought and Opening Calls

IG - Morning Thought and Opening Calls

Overnight several key pieces if US data came out including core CPI figures (up to 0.3% versus 0.2% forecasted) and existing home sales, up to 4.92 million versus 4.89 million expected. Unemployment figures were poor, however up around 9,000 claims to 362,000. Considering the fire-engine red that was draped over every investor’s screens in Asian and Europe, the main piece of data that most have focused on in the US is the Philly Fed Manufacturing Index, which was a massive disappointment, registering a -12.5 contraction versus a forecasted expansion of 1.1. This has seen the US markets following the Asian and European sessions down, but it is no way near as strong as we experienced. Heading into the close the S&P 500 was off 0.66% to 1501 points as investors started to reread the Fed minutes with wiser eyes and saw that they were not as hawkish as reported and that most of the members calling for the early withdrawal are non-voting members and should settle ‘liquidity-dependent’ hedge funds.

Europe didn’t fare much better with its macro-economic releases, with French and German PMI figures out. There was a slight tale of two sectors here; manufacturing PMIs for both countries were in line and are normally the more influential figures, however services PMIs were down in both countries and that led the headline news in Europe. The figure also led the bears to do a merry dance, sending Europe stocks down with it.

Fears the region is ‘struggling’ to shake off its recession is a vexing one; we understand things are still strained and that most countries are just keeping their heads above water with regards to GDP, for example. However, ECB President Mario Draghi’s comments keep ringing in our ears. He has publically stated ‘he will do whatever it takes’ to stabilise the region. We know Mr Draghi has the OMTs in his back pocket if required and he hasn’t had to use them so far. We have already seen that the original LTRO loans are being repaid on time and in larger amounts than expected (next payment is due this weekend) plus sentiment in the area is improving. Bears are loving one-day headlines, and this is just that one-day headline.

This week saw earnings season hit full swing as cyclical stocks took centre stage, and it has been a mixed bag. BHP came out with an inline consensus report, however year-on-year it was off badly and coupled with the news it is to get a new CEO (internal promotion mind you) the stock promptly sold off, even with iron ore and petroleum (80% of EBIT) reporting record production levels and beating consensus. The sell-off looks set to continue today with BHP’s ADR pointing to a 1.6% dive this morning to $36.57 after being hammered in London overnight. Woodside also released strong numbers as Pluto finally turned profitable and with the sell-down at the Browse project reporting that net profit was strong. Stripping that out however, it was just an inline result. But, with guidance looking healthy and WPL having traded sideways for such a long time, it moved up (however it wasn’t spared yesterday) and has made reporting season very hard to call.

Moving to the open, we are calling the ASX 200 flat, down 1 point to 4979 (-0.02%). After such a violent reaction to rumours out of the US that a commodities hedge fund had to sell out of long positions - coupled with the statement from Chinese Premier Wen Jiabao that home prices ‘grew excessively fast’ - should ‘promptly’ have price restrictions imposed. The question becomes; was this the trigger for ‘the pullback we had to have’? The ASX was down but holding before Asia came online to drag it lower yesterday, and don’t be surprise to see this again today as investors cash out and look to come back in at slightly lower prices. It will be a very busy day again today as investors reassess positions and contemplate this question, however volumes are up and so is optimism, so watch for some green.

MarketPrice at 8:00am AESTChange Since Australian Market ClosePercentage Change
AUD/USD1.02420.0002 0.02%
ASX (cash)4979-1 -0.02%
US DOW (cash)13869-33 -0.24%
US S&P (cash)1503.1-6.5 -0.43%
UK FTSE (cash)6297-51 -0.80%
German DAX (cash)7598-89 -1.15%
Japan 225 (cash)11263-42 -0.37%
Rio Tinto Plc (London)35.20-1.27 -3.47%
BHP Billiton Plc (London)20.98-0.86 -3.94%
BHP Billiton Ltd. ADR (US) (AUD)36.57-0.60 -1.62%
US Light Crude Oil (April)92.93-1.43 -1.52%
Gold (spot)1576.4816.1 1.03%
Aluminium (London)2074-13 -0.63%
Copper (London)7853-50 -0.63%
Nickel (London)16757-54 -0.32%
Zinc (London)2325-3 -0.14%
Iron Ore156.2-2.7 -1.70%

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.

EVAN LUCAS
Market Strategist
www.igmarkets.com

ENDS

© Scoop Media

 
 
 
 
 
Business Headlines | Sci-Tech Headlines

 

Strike: Lyttelton Port Workers Vote To Escalate Dispute

Members of the Rail and Maritime Transport Union (RMTU) at Lyttelton Port today voted to escalate their industrial action. Around 200 RMTU members have been operating an overtime ban since 17 December and today they endorsed a series of full withdrawals of labour at the port. More>>

ALSO:

Scoop Business: NZ Dollar Falls To 3-Year Low As Investors Favour Greenback

The New Zealand dollar fell to its lowest in more than three years as investors sold euro and bought US dollars, weakening other currencies against the greenback. More>>

ALSO:

Scoop Business: NZ Govt Operating Deficit Smaller Than Expected

The New Zealand’s government’s operating deficit was smaller than expected in the first five months of the financial year as a clampdown on expenditure managed to offset a shortfall in the tax-take from last month’s forecast. More>>

ALSO:

0.8 Percent Annually:
NZ Inflation Falls Below RBNZ's Target

New Zealand's annual pace of inflation slowed to below the Reserve Bank's target band in the final three months of the year, giving governor Graeme Wheeler more room to keep the benchmark interest rate lower for longer.More>>

ALSO:

NASA, NOAA: Find 2014 Warmest Year In Modern Record

Since 1880, Earth’s average surface temperature has warmed by about 1.4 degrees Fahrenheit (0.8 degrees Celsius), a trend that is largely driven by the increase in carbon dioxide and other human emissions into the planet’s atmosphere. The majority of that warming has occurred in the past three decades. More>>

ALSO:

Scoop Business: New Zealand’s Reserve Bank Named Central Bank Of The Year

The Reserve Bank of New Zealand’s efforts to stifle house price inflation by using new policy tools has seen the institution named Central Bank of the year by Central Banking Publications, a publisher specialising in global central banking practice. More>>

ALSO:

Get More From Scoop

 
 
Standards New Zealand

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