IG Markets - Morning Thoughts
IG Markets - Morning Thoughts
Risk assets were well supported through the European session by positive commentary from the eurozone officials. The German member of the ECB's Executive Board, Jorg Asmussen, signalled full support to Mario Draghi's bond-buying programme, noting that purchases may be ‘unlimited’ in scale to price out the ‘convertibility risk’ of a Eurozone break-up. Mr Asmussen's support was a shot in the arm to the ECB's bond-buying programme, which was earlier criticised by the German Bundesbank. The euro was bid across the board, with EUR/USD charging to a high of 1.249 (from around 1.236). The pair even held steady at those high levels despite a dip in sentiment towards the end of the US session. Also of note were Atlanta Fed President, Dennis Lockhart’s comments. He cautioned against employing monetary policy ‘too aggressively’ to address economic problems that can be resolved only by fiscal reforms.
Ahead of the open, we are calling the Aussie market flat at 4382. Once again, the 4400 level will be in focus after the market briefly traded at that level yesterday. AUD/USD traded as high as 1.052 only to retreat to around 1.047 late in the US session. On the economic front, we only have MI leading index data to look out for. Elsewhere in the region, Japan’s trade balance figures will be in focus. Since its last big move higher, USD/JPY has been range and this data could be a catalyst for its price action
On a stock level, we expect a softer start for BHP Billiton, with its ADR pointing to a 0.3% fall to $33.17. BHP reports after market today, so it will be interesting to see how the stock trades in the UK session later today. We are likely to see some positioning ahead of the report. After the positive surprise from Rio Tinto’s report, optimists will be hoping BHP finally breaks out of the range it’s been stuck in for a while. CSL Limited has reported its full-year earnings with profit of $982.6 million coming in ahead of consensus of $978.4 million. The company may conduct an additional $900 million buyback and it announced a final dividend of 47 cents versus 45 cents consensus. Other notable stocks reporting are AGL Energy, Coca Cola Amatil, Suncorp and Woodside.
at 6:30am AEST Change Since Australian Market
Close Percentage Change
AUD/USD 1.0476 -0.0018 -0.18%
ASX (cash) 4382 -2 -0.03%
US DOW (cash) 13205 -58 -0.44%
US S&P (cash) 1414.8 -4.5 -0.32%
UK FTSE (cash) 5827 -15 -0.26%
German DAX (cash) 7064 15 0.21%
Japan 225 (cash) 9157 0 0.00%
Rio Tinto Plc (London) 30.63 0.63 2.11%
BHP Billiton Plc (London) 19.80 0.29 1.49%
BHP Billiton Ltd. ADR (US) (AUD) 33.17 -0.10 -0.31%
US Light Crude Oil (October) 96.81 0.23 0.24%
Gold (spot) 1637.8 14.7 0.91%
Aluminium (London) 1867 23 1.23%
Copper (London) 7610 111 1.48%
Nickel (London) 15825 267 1.71%
Zinc (London) 1810 14 0.78%
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