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IG Markets - Morning Thoughts And Opening Prices

IG Markets - Morning Thoughts And Opening Prices

Good morning

Overnight, US markets enjoyed their best session in nearly a fortnight. They were buoyed by comments of support for the ECB’s plans to assist the eurozone from German Chancellor Angela Merkel and courtesy of Cisco lifting its dividend by 75%. For much of the last fortnight, US markets have been range bound, recording the narrowest daily fluctuations since January 2011. This has also been evidenced by the VIX currently trading at five-year lows. Last night, growing expectations that Spain would formerly apply for aid at a meeting of finance ministers and central banks governors next month, allowing the ECB to buy Spanish debt in the secondary market, enhanced the markets belief that the eurozone crisis could be managed.

The growing optimism that an outright eurozone break-up may now becoming a less likely scenario saw risk-averse short positions unwound and US equities approach fresh four-year highs. That optimism is likely to spill over into our local session allowing the ASX 200 to build on its 1.1% gains of yesterday, which were predicated on comments from Chinese Premier Wen Jiabao who said that cooling inflationary pressures allowed room for further easing adjustments to monetary policy in the coming months. With one of the market’s prime concerns being too rapid a slowdown in China, suggestions of more stimulus from the PBoC was just the tonic global equity markets needed to break them out of their recent malaise. Our opening call is for the market to unwind approximately 16 points or 0.4% higher at 4347.

Today’s gains are likely to be relatively broad based, but with a ‘risk on’ bias in the air, materials and energy names are likely to be among the day’s better performers. This notion is also supported by the weaker dollar/higher commodity prices thematic evidenced overnight.

With no material economic data out around the region today, investors will continue to focus on the local earnings season. Among the notables reporting today are APN News and Media, Santos, QBE as well as a trading update from ANZ.

MarketPrice at 6:30am AESTChange Since Australian Market ClosePercentage Change
AUD/USD1.05120.0036 0.35%
ASX (cash)434716 0.38%
US DOW (cash)1324671 0.54%
US S&P (cash)1417.78.4 0.59%
UK FTSE (cash)5847-4 -0.06%
German DAX (cash)700139 0.55%
Japan 225 (cash)914047 0.52%
Rio Tinto Plc (London)30.510.13 0.42%
BHP Billiton Plc (London)19.650.29 1.47%
BHP Billiton Ltd. ADR (US) (AUD)32.920.04 0.12%
US Light Crude Oil (September)95.231.08 1.15%
Gold (spot)1614.612.6 0.79%
Aluminium (London)1852130.69%
Copper (London)7464700.95%
Nickel (London)155451861.21%
Zinc (London)1853191.05%

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.

Cameron Peacock
Market Analyst
IG Markets


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