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IG Markets: Morning Prices

On Wall Street overnight, the theme of extremely low volumes continued, although not quite as low as Monday’s record. Despite weaker-than-expected reads on consumer confidence and Case Schiller House Price Index, the major indices finished mostly higher for the session.

The Dow Jones Industrial Average was the top performer and managed to close at its highest point since August 2008. Elsewhere, the broad-based S&P 500 added 0.1% while the NASDAQ slipped, declining 0.2% on the session.

Locally, the ASX 200 is being called to open the session 0.2% lower at 4768 despite the modest strength in US indices this week.

In terms of sectors, all eyes are likely to be on the materials space following Saturday’s decision in China to hike official interest rates. With the London Metals Exchange closed since, we’ve yet to fully see how metal markets will take this news. Interestingly, markets in the US seem to have largely shrugged it off. Today, based purely on BHP Billiton’s ADR, it looks like we could see some weakness across the sector with BHP Billiton called to open 1.2% lower at $45.51.

Despite some overnight weakness in the Crude Oil price, there should be some strength among energy names following a positive overnight lead from the US sector and reasonably solid gains over the last few US sessions. Crude Oil is now sitting US$91 per barrel, just shy of the 26-month high at US$91.88 per barrel.

Elsewhere, there was some strength among consumer staples names that may help the sector here, although it will be interesting to see whether or not concerns over Christmas retail shopping weigh. Given all the press about post-Christmas sales, we could see some weakness among consumer discretionary names which will be hampered by a 0.2% fall in US names overnight.

In summary, it looks like a modestly weaker open this morning, will eyes firmly on how our resource names react to China’s rate hike on Christmas Day. With convincing leads very hard to come by, don’t be surprised if we are a little off the mark.

In currency news, the Australian dollar has continued to strengthen against its US counterpart, currently trading at 1.0089 off earlier session highs of 1.0151. The euro had a bumpy session overnight on very light volumes, trading to a high of 1.3273 before succumbing to selling pressure. It now trading around the 1.3120 level after getting as low as 1.3093.

Market Price at 8:00am AEST Change Since Australian Market Close 2pm Friday Percentage Change
AUD/USD 1.0093 0.0063 0.63%
ASX (cash) 4768 -10 -0.20%
US DOW (cash) 11586 13 0.11%
US S&P (cash) 1259.7 2 0.19%
UK FTSE (cash) 5982 -9 -0.15%
German DAX (cash) 6974 -84 -1.18%
Japan 225 (cash) 10285 13 0.12%
Rio Tinto Plc (London) Closed - -
BHP Billiton Plc (London) Closed - -
BHP Billiton Ltd. ADR (US) (AUD) 45.51 -0.53 -1.15%
US Light Crude Oil (Feb) 91.25 -0.26 -0.28%
Gold (spot) 1405.9 23.9 1.73%
Aluminium (London) Closed - -
Copper (London) Closed - -
Nickel (London) Closed - -
Zinc (London) Closed - -
RBA Cash Rate to be raised by 25bp (Feb) (%) 6.3 (last)

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