IG Markets Morning Prices

It was an interesting night in equities, commodity and currency markets, with plenty of reasons to lighten-up on risk. US markets held up well, though closing down 0.3% at 1304. This occurred despite some negative earnings reports from US corporations and tension flaring up again in Egypt, where violent clashes between pro and anti-government protestors left multiple causalities.

The Dow Jones Industrial Average faired best closing unchanged at 12041, the broader S&P500 lost 0.3% at 1304 and the NASDAQ closed the session out with a 0.2% lose at 2321.

The US Dollar traded higher against all G10 currencies, with the exception of the Canadian dollar and Sterling which gained marginally over the session. The British pound has recently been a strong performer, trading to a session high of 1.6230; the firmest level since November 2010. However, the governor General Charles Bean said central bank rates may have to rise if oil prices continue to move higher. Like the euro, the Bank of England is seeing clear inflationary signs and the fixed income and currency markets are pricing in expectations of rate hikes later this year.

The euro lost ground after a German government official said Berlin opposed using the European Financial Stability Facility (EFSF) to buy periphery debt. The Australian dollar followed suit, mirroring the euro’s price action.

In economic data, all eyes are focused on Friday’s non-farms payrolls, with 140,000 private-sector jobs expected to be created. Overnight, ADP private-sector job numbers showed an improvement from December, beating expectations by a huge 33%! Whilst this is a positive, it is by no means a precursor to Friday’s report, as it was a poor indication in December. So, whilst last night’s numbers were encouraging, their impact on the equity market was reasonably minimal.

Given the price action in US markets overnight, we are expecting a flat open locally. With most of Asia celebrating Lunar New Year today, some of the impetus to drive us above 4800 may be lost. It is worth noting that a couple of weeks ago there had been speculation that the Chinese government could look to hike interest rates today. If this was to play out it would be a reason to take a short position in the AUD, or a commodity/ resource company.

Yesterday’s sizable moves in some of the small-cap resource names were interesting, with big moves in Sundance, Murchison Metals and Integra Mining to name a few. After some strong downward moves, with traders locking in profits, perhaps yesterday’s direction will have further to go and could certainly be worth keeping an eye on the volumes behind them. Commodity prices overnight were generally supportive, so gains should be seen in this space today; BHP’s ADR is testament to that.
Elsewhere, traders will be disseminating the second quarter earnings results from News Corp and the impact of last night’s cyclone in Queensland.

Market Price at 8:00am AEST Change Since Australian Market Close Percentage Change
AUD/USD 1.0082 -0.0042 -0.42%
ASX (cash) 4792 -5 -0.10%
US DOW (cash) 12029 8 0.07%
US S&P (cash) 1303.2 -2 -0.18%
UK FTSE (cash) 5999 25 0.42%
German DAX (cash) 7179 -13 -0.19%
Japan 225 (cash) 10445 -23 -0.21%
Rio Tinto Plc (London) 45.08 1.64 3.76%
BHP Billiton Plc (London) 25.14 0.84 3.44%
BHP Billiton Ltd. ADR (US) (AUD) 46.20 0.50 1.10%
US Light Crude Oil (Mar) 90.96 0.28 0.31%
Gold (spot) 1336.7 -4.28 -0.32%
Aluminium (London) 2530.00 -20 -0.78%
Copper (London) 9960.00 15 0.15%
Nickel (London) 27996.00 32 0.11%
Zinc (London) 2475.00 8 0.32%
RBA Cash Rate to be raised by 25bp (Mar) (%) 7.00 0 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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