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IG Markets - Morning Thoughts And Opening Prices

Good morning,

Risk assets took a breather with risk currencies and equities retreating from their highs. EUR/USD momentarily broke above 1.28, but the lack of any fresh incentives kept it subdued while AUD/USD held its ground above 1.033. With so many key risk events ahead, it just seems markets are entering a period of consolidation with a wait and see approach. The FOMC decision on Thursday, followed by the respective Eurogroup and ECOFIN meetings on Friday and Saturday, should offer further guidance to the FX markets. There is also the German Constitutional Court on Wednesday to look out for and developments from the Troika report. The S&P experienced a key reversal in Monday’s trade and this could be a bearish signal. The S&P printed a new high, but ended up finishing below Friday’s close which could indicate a change in trend.

Ahead of the open, we are calling the Aussie market down 0.4% at 4318. China concerns are likely to remain the dominant theme in Asian trade following the data we received over the past couple of days. The country's trade surplus was wider than expected, but imports contracted by 2.6%, and this (along with news of an Australian coal mine closure) did nothing to boost sentiment towards the Aussie dollar. Weaker imports are often cited as a sign of a consumption slowdown, which will not help hopes for rebalancing in the economy. On the local economic front, we have NAB business confidence due out today.

On a stock level, we expect a slightly firmer start for BHP Billiton, with its ADR pointing to a 0.1% rise to $32.48. Iron ore miners will be in focus yet again today after iron ore prices surged 6.7%, their biggest gain since December 2008. We might see gold stocks retreat from recent highs today after the precious metal dropped overnight. CSL will be one to watch after its Biotherapies unit received a US government contract for influenza pandemic preparedness and response with a potential value of $1.5 billion if all optional activities are exercised. Investors will also be waiting on the regulatory approval for the Qantas/Emirates partnership.

MarketPrice at 6:30am AESTChange Since Australian Market ClosePercentage Change
AUD/USD1.0335-0.0025 -0.24%
ASX (cash)4318-16 -0.37%
US DOW (cash)13239-31 -0.23%
US S&P (cash)1430.2-7.4 -0.51%
UK FTSE (cash)5760-21 -0.36%
German DAX (cash)7179-31 -0.43%
Japan 225 (cash)8805-64 -0.73%
Rio Tinto Plc (London)30.700.48 1.61%
BHP Billiton Plc (London)19.100.04 0.22%
BHP Billiton Ltd. ADR (US) (AUD)32.480.02 0.07%
US Light Crude Oil (October)96.270.00 0.00%
Gold (spot)1725.9-11.2 -0.64%
Aluminium (London)2064371.82%
Copper (London)8067590.74%
Nickel (London)167411851.12%
Zinc (London)212250.24%

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.

Kind regards,
Stan Shamu
Market Strategist
IG Markets


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