IG Markets - Morning Thoughts And Opening Prices
It was a fairly quiet session for risk assets with limited data releases on the calendar. The euro managed to stay above the 1.25 level overnight amid thin markets, despite a soft August German IFO report. With EU President Van Rompuy scheduled to meet Spanish Prime Minister Mariano Rajoy ahead today, we could start seeing increased volatility in the euro. They are expected to discuss measures to lower the high borrowing costs of the Spanish government. In the US, more dovish talk from the Fed speakers continued with Chicago Fed President Charles Evans calling again for 'open-ended bond purchases' to boost the economy, while Cleveland Fed President Sandra Pianalto said the economic recovery remains frustratingly slow and ‘large-scale asset purchases can be effective’. Any comments by Fed members are being closely watched ahead of the Jackson Hole symposium on August 31.
Ahead of the open, we are calling the Aussie market relatively flat at 4345. Gauging by the moves we saw in US trade, we could also be in for a session of quiet consolidation in fairly tight ranges after the open. AUD/USD continued to struggle and broke through the 1.038 support zone. A report showed profit at China’s industrial companies fell for a fourth month set the tone for the Aussie dollar. China growth concerns remain the key issue and with sliding iron ore prices, the pair is likely to remain under pressure in the medium term. On the economic front, today we have new home sales data to look out for.
On a stock level, we expect a softer start for BHP Billiton, with its ADR pointing to a 0.4% fall to $32.89. The main story in the commodities space was gold trading at a four-and-a-half month high before pulling back on profit taking. There were also some big moves in the energy space as tropical storm Isaac churned across the Gulf of Mexico and headed for the Louisiana refining hub. Gold miner Medusa Mining will be in focus after saying the probable reserve at its Co-O Mine was increased by 10% at June 30. Reporting today we have Aristocrat Leisure, Beach Energy, Flight Centre and Seven Group.
|Market||Price at 6:30am AEST||Change Since Australian Market Close||Percentage Change|
|US DOW (cash)||13125||-33||-0.25%|
|US S&P (cash)||1412.3||-1.3||-0.09%|
|UK FTSE (cash)||5767||-2||-0.03%|
|German DAX (cash)||7018||60||0.87%|
|Japan 225 (cash)||9095||9||0.10%|
|Rio Tinto Plc (London)||29.10||-0.47||-1.58%|
|BHP Billiton Plc (London)||19.34||-0.26||-1.34%|
|BHP Billiton Ltd. ADR (US) (AUD)||32.89||-0.13||-0.40%|
|US Light Crude Oil (October)||95.70||-1.38||-1.43%|
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.
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