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


IG Markets - Morning Thoughts

IG Markets - Morning Thoughts

It’s all about equities printing record/cycle highs at the moment. This is occurring as investors continue to respond to what seems to be a concerted effort by central banks to ease, plus a slight improvement in data from key economies. Ever since Friday’s solid non-farm payrolls numbers, global data has been on a roll, with China’s trade balance result and German factory orders/industrial production impressing yesterday. The single currency has perhaps been the biggest beneficiary of the improving economic data out of Germany. When ECB President Mario Draghi cut rates last week, he emphasised the ECB is ready to do more should economic data continue to deteriorate. As a result, the German data saw EUR/USD spike to $1.3195 before a slight pullback into the $1.316 region. AUD/USD enjoyed a strong bounce off its lows in the $1.015 region yesterday, helped by the better-than-expected China trade balance data. The pair even managed to pop back above $1.0200 early in US trade, but found sellers once again and continues to gravitate back towards Tuesday’s lows. Today is another big day for the local currency, with jobs numbers and China CPI all due out at 11.30am AEST. The unemployment rate is expected to remain steady at a three-year high of 5.6% with 11,500 jobs added. Meanwhile, China’s CPI is expected to rise 2.3% which is well under the government’s target over there and therefore is fairly good for risk. Should the jobs data turn out to be market friendly, then resistance for AUD/USD will be in the $1.0222 region, while disappointing data will probably see lows in the $1.015 region retested and possibly breached.

Ahead of the open, we are calling the ASX 200 up 0.2% at 5208. The dominant theme in yesterday’s trade was a rotation out of some of the defensive names and into the resource stocks. Seeing investors come out of their comfort zone is always a good sign, and might just be what this market needs to keep the momentum going. A situation where the banks and miners move higher in unison has been rare this year and is exactly what this market needs to breathe confidence into investors.

BHP’s ADR is pointing to a 0.9% gain to 34.60, with iron ore back above 130. Gold/copper names should also be well supported after the two metals enjoyed strong gains. The yield-play will be back in focus today with NAB reporting its first-half results. At first glance, the numbers look solid with the cash profit of $2.92 billion coming in slightly ahead of consensus at $2.91 billion. NAB’s dividend came in at 93 cents, which is also a touch ahead of estimates, but its net interest margin might disappoint analysts after coming in at 2.03%. Some analysts were expecting a net interest margin of 2.07%. ANZ Bank goes ex-div today and therefore we expect to see it underperform. News Corp (NWS) has beaten expectations in its Q3 earnings report. The fact that shares rallied nearly 4% in after-hours trade suggests good days in Australia as well, and it should continue its strong uptrend. Publishing and satellite broadcasting remain weak, however strong results were seen in cable, TV and film. On the headline Q3 EBIT grew 4%, around 10% above expectations, while adjusted EPS beat consensus by a touch at $0.35. NWS is a sold brand and ticks a lot of boxes for investors, and despite paying a low 0.9% yield it remains a standout for growth focused investors. Also keep an eye on Billabong with reports suggesting it could see a revised bid under 45 cents a share.

Market Price at 7:00am AEST Change Since Australian Market Close Percentage Change
AUD/USD 1.0171 -0.0015 -0.15%
ASX (cash) 5208 8 0.16%
US DOW (cash) 15102 68 0.45%
US S&P (cash) 1632.4 8.5 0.53%
UK FTSE (cash) 6593 32 0.49%
German DAX (cash) 8257 65 0.79%
Japan 225 (cash) 14357 71 0.50%
Rio Tinto Plc (London) 31.01 0.29 0.94%
BHP Billiton Plc (London) 19.08 0.26 1.37%
BHP Billiton Ltd. ADR (US) (AUD) 34.60 0.30 0.87%
US Light Crude Oil (June) 96.64 0.94 0.98%
Gold (spot) 1474.05 20.9 1.43%
Aluminium (London) 1908 26 1.38%
Copper (London) 7419 154 2.12%
Nickel (London) 15404 210 1.38%
Zinc (London) 1895 22 1.17%
Iron Ore 130.2 0.2 0.15%

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.


© Scoop Media

Business Headlines | Sci-Tech Headlines


Trade: NZ Trade Deficit Widens To A Record In September

Oct. 27 (BusinessDesk) - New Zealand's monthly trade deficit widened to a record in September as meat exports dropped to their lowest level in more than three years. More>>


Animal Welfare: Cruel Practices Condemned By DairyNZ Chief

DairyNZ chief executive Tim Mackle says cruel and illegal practices are not in any way condoned or accepted by the industry as part of dairy farming.

Tim says the video released today by Farmwatch shows some footage of transport companies and their workers, as well as some unacceptable behaviour by farmers of dragging calves. More>>


Postnatal Depression: 'The Thief That Steals Motherhood' - Alison McCulloch

Post-natal depression is a sly and cruel illness, described by one expert as ‘the thief that steals motherhood’, it creeps up on its victims, hiding behind the stress and exhaustion of being a new parent, catching many women unaware and unprepared. More>>


DIY: Kiwi Ingenuity And Masking Tape Saves Chick

Kiwi ingenuity and masking tape has saved a Kiwi chick after its egg was badly damaged endangering the chick's life. The egg was delivered to Kiwi Encounter at Rainbow Springs in Rotorua 14 days ago by a DOC worker with a large hole in its shell and against all odds has just successfully hatched. More>>


International Trade: Key To Lead Mission To India; ASEAN FTA Review Announced

Prime Minister John Key will lead a trade delegation to India next week, saying the pursuit of a free trade agreement with the protectionist giant is "the primary reason we're going" but playing down the likelihood of early progress. More>>



MYOB: Digital Signatures Go Live

From today, Inland Revenue will begin accepting “digital signatures”, saving businesses and their accountants a huge amount of administration time and further reducing the need for pen and paper in the workplace. More>>

Oil Searches: Norway's Statoil Quits Reinga Basin

Statoil, the Norwegian state-owned oil company, has given up oil and gas exploration in Northland's Reinga Basin, saying the probably of a find was 'too low'. More>>


Modern Living: Auckland Development Blowouts Reminiscent Of Run Up To GFC

The collapse of property developments in Auckland is "almost groundhog day" to the run-up of the global financial crisis in 2007/2008 as banks refuse to fund projects due to blowouts in construction and labour costs, says John Kensington, the author of KPMG's Financial Institutions Performance Survey. More>>


Get More From Scoop

Search Scoop  
Powered by Vodafone
NZ independent news