IG Markets Overnight Market Report - 9.00am

Good morning,

Overnight Market Report - 9.00am

On Wall Street overnight, the major US indices all finished in negative territory as sovereign debt concerns continued to weigh on investors’ minds. However, in positive developments President Obama announced his administration would work with the Republicans on extending the Bush era tax cuts and consumer confidence came in at 54.1, the highest level since June and well ahead of market expectations.

For the session, the technology heavy NASDAQ was the worst performer, down 1.1% while the broad-based S&P 500 fell 0.6% and the Dow Jones Industrial Average lost 0.4%.

Locally, the ASX 200 is called to open the session 10 points of 0.2% weaker at 4574 following the overnight softness.

In terms of sectors, the materials space is likely to be the major gainer today after it was the best relative performer in the US, despite only finishing flat and performed strongly during the European session. On the London Metals Exchange, base metals all jumped sharply, up between 0.4% and 2.6% while in normal equities trade, Rio Tinto and BHP Billiton both added 0.9%. BHP Billiton’s local ADR is pointing towards a gain of 0.8% on the open. Gold stocks should be supported too after gold futures rallied 1.4% to US$1384.1/oz since our 4.30pm close yesterday.

Elsewhere, it’s going to be hard work for local names with the financial, industrial and energy sectors all declining in NY trade. They were down between 0.2% and 0.6%. Consumer staples and discretionary names will likely see moderate weakness too after they fell 0.5% and 0.2% respectively.

In summary, it looks like it will be strength among material names offsetting broader-based weakness. Having said that, the market did sell off a lot more than expected yesterday so perhaps we could see a bit of some outperformance today. In terms of data all eyes will be on 11.30am release of Q3 GDP numbers and Chinese manufacturing numbers at 12pm and 1pm respectively. As it stands, the market is looking for growth of 0.4% on quarter.

Should the number disappoint the market and come in below 0.3%, then we’d likely see significant pressure on the AUDUSD. It traded as low as 0.9544 before recovering a little to be around the 0.9587 level. The EURUSD was smashed yet again on further contagion fears, dropping to a low of 1.2968. It’s now around the 1.2980 level.

Market Price at 8:00am AEST Change Since Australian Market Close Percentage Change
AUD/USD 0.9587 -0.0031 -0.32%
ASX (cash) 4574 -10 -0.22%
US DOW (cash) 10992 -27 -0.24%
US S&P (cash) 1178.6 -5 -0.45%
UK FTSE (cash) 5537 -33 -0.60%
German DAX (cash) 6693 -32 -0.47%
Japan 225 (cash) 9920 -43 -0.43%
Rio Tinto Plc (London) 40.80 0.37 0.90%
BHP Billiton Plc (London) 22.85 0.20 0.86%
BHP Billiton Ltd. ADR (US) (AUD) 43.09 0.35 0.82%
US Light Crude Oil (Jan) 83.66 -1.48 -1.74%
Gold (spot) 1384.1 19.6 1.44%
Aluminium (London) 2281 9 0.40%
Copper (London) 8387 216 2.64%
Nickel (London) 22845 375 1.67%
Zinc (London) 2111 36 1.73%
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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