IG Markets - Morning Thoughts And Opening Prices
It was another quiet session for risk assets with major equity bourses and FX pairs remaining in tight ranges. After ECB President Mario Draghi failed to give details of the bond-buying programme in the last meeting, there are fears that the prospect of another ECB press conference lacking in specifics could weigh on the euro. In the US, July pending home sales rose 2.4% month-on-month (m/m) and 15.0% year-on-year (y/y), beating consensus forecasts for 1.0% m/m and 11.1% y/y, respectively. Q2 real GDP growth was revised up to 1.7%, as expected. As a result, the US dollar found some support and marginally gained ground in most major crosses. AUD/USD continued to drift south and broke the lower end of the range in which it had recently been trading. The pair printed a low of 1.03379 this morning.
Ahead of the open, once again we are calling the Aussie market down 0.2% at 4349. On the economic calendar today we have building approvals and private capital expenditure due out. It has been a very quiet week on the local economic calendar and today is the first we actually have some market sensitive data being released. However, we doubt this will have much bearing on the RBA’s interest rate decision.
On a stock level, we expect another down day for BHP Billiton, with its ADR pointing to a 0.7% fall to $32.54. Commodities had a tough session with gold and oil among the worst hit. The recent iron ore price slide is likely to keep the big resource name on the defensive. Iron ore dropped to US$90.30 per tonne and this will put stocks like Atlas Iron and Fortescue Metals into focus. FMG founder Andrew Forrest is said to have bought five million shares in the company for $20.1 million. It is a fairly quiet day on the reporting front with not many majors release figures. Boart Longyear, Kingsgate and Medusa Mining are perhaps some of the main ones to look out for.
|Market||Price at 6:30am AEST||Change Since Australian Market Close||Percentage Change|
|US DOW (cash)||13092||-21||-0.16%|
|US S&P (cash)||1410.9||-2.6||-0.19%|
|UK FTSE (cash)||5741||-29||-0.51%|
|German DAX (cash)||7001||-11||-0.15%|
|Japan 225 (cash)||9055||-15||-0.16%|
|Rio Tinto Plc (London)||27.74||-0.88||-3.08%|
|BHP Billiton Plc (London)||19.06||-0.27||-1.38%|
|BHP Billiton Ltd. ADR (US) (AUD)||32.54||-0.22||-0.67%|
|US Light Crude Oil (October)||95.18||-0.75||-0.78%|
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