IG Markets Morning Prices

Good morning,

In the US overnight, stocks spent most of the session firmly in positive territory before a late session sell off among technology and retail names saw the major indices finish mixed. M&A activity had powered early gains.

The Dow Jones Industrial Average ended up the best performer, rising 0.2% while the S&P 500 finished the session unchanged at 1240. The NASDAQ fell, closing the day 0.5% weaker.

Locally, the ASX 200 is called to open the session 0.3% firmer at 4772 following the mixed overnight leads. Gains today are likely to be focussed on those sectors exposed to commodities after both the energy and materials sectors outperformed overnight following a bout of selling in the US dollar.

Energy names are likely to be well bid after the US sector was the biggest gainer, rising 0.9% after crude oil futures rallied a modest 0.3% to US$88.31 since our 4.30pm yesterday.

Material names will likely join in the rally after base metals all rose on the London Metals Exchange overnight thanks to a weaker US dollar and strong demand fundamentals. Aluminium, zinc, nickel and copper were all up between 0.6% and 2.1% respectively. Elsewhere, in normal London trade both Rio Tinto and BHP Billiton were well bid, adding 1.9% and 2.3% respectively. BHP’s ADR is calling the Australian listed miner 0.7% firmer at $45.77.

Gold names should be higher too after the yellow metal rose another 0.5% to be trading around the US$1394.00/oz level. Elsewhere, financials and industrials were largely flat on the day while consumer discretionary names saw some selling pressure.

In summary, it looks we’re in for another relatively quiet day on the trade front, with only NAB business confidence and housing starts due on the economic front; they’re unlikely to have much of an impact on the market.

It was an interesting night in the currency markets with the USD losing ground across the board as US treasury yields headed lower after the recent surge, lowering the appeal of the USD for overseas investors.

Whilst there is still a corner of the market questioning the US budget deficit further down the line the overriding thematic overnight was one of adding risk to traders’ portfolios, with the AUD and the Euro being two of the main beneficiaries. US traders supported the view that China not raising rates was positive and pushed the Euro up to an overnight high of 1.3434 and the AUD to 0.9985.

Looking at potential economic releases to drive currencies today, the NAB business confidence at 11.30 should not have a huge impact as traders will be more keenly focused on the ZEW sentiment survey out of Europe and Retail sales and the start of the FOMC meeting in the US.

Market Price at 8:00am AEST Change Since Australian Market Close Percentage Change
AUD/USD 0.9950 0.0107 1.09%
ASX (cash) 4772 15 0.31%
US DOW (cash) 11433 33 0.29%
US S&P (cash) 1242.1 3 0.21%
UK FTSE (cash) 5857 30 0.52%
German DAX (cash) 7027 4 0.05%
Japan 225 (cash) 10275 23 0.22%
Rio Tinto Plc (London) 44.79 0.82 1.86%
BHP Billiton Plc (London) 25.24 0.56 2.27%
BHP Billiton Ltd. ADR (US) (AUD) 45.77 0.33 0.73%
US Light Crude Oil (Jan) 88.31 0.25 0.28%
Gold (spot) 1394.1 7.4 0.53%
Aluminium (London) 2344 15 0.64%
Copper (London) 9240 136 1.49%
Nickel (London) 24675 505 2.09%
Zinc (London) 2333 13 0.56%
RBA Cash Rate to be raised by 25bp (Feb) (%) 10.00 -3.00 -3.00%

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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