IG Markets Morning Prices

IG Markets Morning Prices

Good morning,

In the US overnight, the major indices all rallied hard from their session lows to finish modestly weaker as fears about sovereign debt contagion across the Eurozone continued to rattle investor sentiment, despite the weekend bailout of Ireland. Yields on both Spanish and Portugese debt rose sharply, with Spanish bonds dropping the most since the launch of the Euro.

The broad-based S&P 500 was the best performer, only losing 0.1% for the session. Elsewhere, both the Dow Jones Industrial Average and the technology laden NASDAQ lost 0.4%.

Locally, the domestic market is called to open Tuesday’s session 0.2% softer at 4609 following the negative overnight leads. However, the materials and financial sectors were the best performers on Wall Street so we may see the local market well supported.

Despite mixed base metal leads from the London Metals Exchange and falls of 3.3% and 2.1% for Rio Tinto and BHP Billiton in London trade, the US materials had a pretty good session. Copper giant Freeport McMoRan was the standout, adding 3.5%. Consequently, BHP Billiton’s ADR is calling the locally listed name to open the session 0.3% firmer at $43.38.

Gold stocks should be reasonably well bid too after gold futures added 0.4% to be trading at US$1367/oz.

Local banks should also receive a boost after US financials helped lead the broader market recovery. The likes of Wells Fargo, Bank of America, JP Morgan and Citigroup were all up between 1% and 2.1%, with Wells Fargo the best performer. A note from Royal Bank of Scotland saying they expected several of the banks to raise their dividends in the first quarter of 2011 as they comply with new Federal Reserve capital requirements helped boost the sector.

The energy sector also had a good session and should provide some support for local names. Crude Oil futures put in a strong performance, rising 1.8% to US$85.76 per barrel since our 4.30pm close yesterday.

On the downside, the retailers failed to fire in the US despite a 6.4% boost in retail sales on Black Friday compared to a year earlier and expectations of a spike in online sales on Monday.

In summary, it looks like the local market is going to open modestly lower, with strength among the materials and financials likely to offset some discretionary and staples weakness. In terms of local data, all eyes will be on Building Approvals, Private Sector credit and the Current Account balance due for release at 11.30am.

In currency markets, the Euro plunged to fresh two-month lows as confirmation of Ireland’s rescue package did little to assuage fears of further contagion through the continent, with Spain and Portugal of particular interest. The Euro fell to a session low of 1.3063, a strong Fibonacci support level, from where it bounced to now be trading around the 1.3123 level.

The AUDUSD came under pressure too, falling to a session low of 0.9566 before recovering to be around the 0.9630 level. All eyes will now be on the data due at 11.30am.

Market Price at 8:00am AEST Change Since Australian Market Close Percentage Change
AUD/USD 0.9629 -0.0006 -0.06%
ASX (cash) 4609 -9 -0.20%
US DOW (cash) 11047 -49 -0.44%
US S&P (cash) 1187.1 -4 -0.31%
UK FTSE (cash) 5595 -93 -1.64%
German DAX (cash) 6744 -118 -1.72%
Japan 225 (cash) 10070 -43 -0.42%
Rio Tinto Plc (London) 40.43 -1.36 -3.25%
BHP Billiton Plc (London) 22.66 -0.49 -2.14%
BHP Billiton Ltd. ADR (US) (AUD) 43.38 0.14 0.32%
US Light Crude Oil (Jan) 85.76 1.51 1.79%
Gold (spot) 1366.6 5.4 0.39%
Aluminium (London) 2275 1 0.04%
Copper (London) 8230 -3 -0.04%
Nickel (London) 22660 95 0.42%
Zinc (London) 2071 -44 -2.08%
RBA Cash Rate to be raised by 25bp (Dec) (%) 1.00 0.00 0.00%

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.

ENDS

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