IG Markets Morning Report

Good morning,

In the US overnight, the S&P 500 stretched its winning streak to five sessions in quiet trade as US participants shrugged off a slightly weaker read on third-quarter GDP and softer-than-expected personal consumption data. Unsurprisingly, the VIX, commonly known as the “fear index” fell to its lowest level of 2010, hitting 15.57 as the S&P 500 index moved in its narrowest range since April 2007.

For the session, the broad-based S&P 500 was the top performer, rising 0.3% while the Dow Jones Industrial Average and NASDAQ both added 0.2% for the session.

Locally, the ASX 200 is called to open the session largely unchanged at 4781 despite the modestly firmer overnight leads.

We could see some strength among local financials given yesterday’s underperformance and following a good lead from Wall Street. Wells Fargo, JP Morgan and Bank of America all had a very strong performance, up more than 1.7% after the likes of Bank of New York Mellon and State Street Bank were covered in a report from Raymond James. The brokerage rated BONYM a strong buy and State Street Bank an outperform with targets of $40 and $58 respectively.

Elsewhere, we should see some strength among energy names after Crude Oil futures jumped to the highest level since the Lehman Brothers collapse; it’s trading north of US$90 per barrel after government data indicated oil stockpiles had fallen 5.3 million barrels, which was more than the market had been expecting.

Materials names are likely to be relatively subdued today after a flat lead from Wall Street. Base metals on the London Metals Exchange were mixed at best while in normal London equities trade, Rio Tinto and BHP Billiton added 0.9% and 0.8% respectively. Nonetheless, BHP Billiton’s ADR is calling the local stock 0.1% firmer at $45.85.

In summary, it likely to be another session of very low volumes as traders have either left their desks for the festive season or are just about to depart for their Christmas parties.

In the currency market, volumes were extremely light as the US dollar traded flat for most of the session. Nonetheless, the AUDUSD managed to strengthen against the greenback and push back up through the psychological 1.0000 mark. It hit a high of 10010 before retreating to now be at 1.0000 even. It was a different story for the euro as sovereign debt concerns continued to weigh on the broader currency; it hit a low of 1.3073 before settling around the 1.31 mark.

Market Price at 8:00am AEST Change Since Australian Market Close Percentage Change
AUD/USD 1.0001 0.0037 0.37%
ASX (cash) 4781 2 0.04%
US DOW (cash) 11556 36 0.31%
US S&P (cash) 1258.9 9 0.71%
UK FTSE (cash) 5993 43 0.71%
German DAX (cash) 7076 -4 -0.06%
Japan 225 (cash) 10340 -8 -0.07%
Rio Tinto Plc (London) 45.80 0.43 0.94%
BHP Billiton Plc (London) 26.06 0.22 0.85%
BHP Billiton Ltd. ADR (US) (AUD) 45.85 0.03 0.07%
US Light Crude Oil (Feb) 90.66 0.66 0.73%
Gold (spot) 1385.2 -4.8 -0.35%
Aluminium (London) 2462 32 1.32%
Copper (London) 9345 -20 -0.21%
Nickel (London) 24200 -550 -2.22%
Zinc (London) 2330 18 0.78%
RBA Cash Rate to be raised by 25bp (Feb) (%) 6.30 -2.70 -2.70%

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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