IG Markets: Morning Prices

In the US overnight, the major indices continued Friday’s rebound as amidst mixed economic reports and a modest retreat in oil prices following further reassurances from Saudi Arabia that it could cover the supply shortfall stemming from the Libyan turmoil. On that front, there weren’t too many more developments; media reports suggest anti-government rebels are slowly closing in on the capital Tripoli. However, there’s still a lot of uncertainty as to what will happen next.

The Dow Jones Industrial Average was the session’s best performer, rising 0.8%. Elsewhere, the broad-based S&P 500 added 0.6% while the NASDAQ could only manage a flat finish.

Domestically, the ASX 200 is called to open the session 0.5% firmer at 4854 following the positive overnight leads. We should see reasonably widespread gains ahead a busy day in economic news, although yesterday’s technical glitch which saw trading halted shortly before 3pm could have an impact. Whether it’s bullish or bearish is anyone’s guess.

Materials will once again be in focus after they were the best performers in US trade, rising 0.9%. Base metal leads from the London Metals Exchange were supportive once again, all up between 0.9% and 2.8%. In London equities trade, Rio Tinto rose 1% while BHP was flat on the session. Its ADR is calling the locally listed name 0.7% stronger at $46.43.

Gold futures retreated a tiny bit overnight, down 0.1% to US$1411.50/oz. Tensions in the Middle East, North Africa and on the Korean peninsula kept safe haven assets firmly in focus.

Energy and financial names should be reasonably well supported following gains of 0.6% and 0.5% respectively in US trade Crude oil prices retreated 2.8% from our 4.30pm close yesterday and are trading around the US$97.00/barrel level. Berkshire Hathaway was the top performing financial name overnight, jumping 2.8%. In its annual letter to shareholders, Chairman Warren Buffett said “our elephant gun has been reloaded, and my trigger finger is itchy”, referring to the firms hunt for further acquisitions.

In summary, it looks we’re set for a positive session on the Australian bourse. There are a few big economic releases that forex and equities traders will be focussing on. January retail sales data is due for release at 11.30am, with the market expecting growth of 0.3%. This reading will include the all important post-Christmas sales, which could add further importance to the data; retailers like David Jones, Myers, Harvey Norman and JB HiFi will all be watched carefully.

It doesn’t stop there, with the always important Chinese manufacturing numbers due around midday; the market reaction to these numbers could be interesting given the Chinese authorities are trying to slow the economy down a little.

Finally, February’s interest rate decision is due at 2.30pm this afternoon. It’s almost a non-event in that rates are almost certain to remain on hold at 4.75%. What will be interesting is whether or not there is a change to the RBA’s statement, with the market keenly watching for comments on inflation.

Market Price at 8:00am AEST Change Since Australian Market Close Percentage Change
AUD/USD 1.0187 0.0027 0.27%
ASX (cash) 4854 22 0.46%
US DOW (cash) 12233 129 1.07%
US S&P (cash) 1328.3 11 0.84%
UK FTSE (cash) 6003 4 0.07%
German DAX (cash) 7291 119 1.66%
Japan 225 (cash) 10675 78 0.73%
Rio Tinto Plc (London) 43.10 0.44 1.03%
BHP Billiton Plc (London) 24.34 0.01 0.04%
BHP Billiton Ltd. ADR (US) (AUD) 46.43 0.32 0.70%
US Light Crude Oil (Apr) 96.86 -2.75 -2.76%
Gold (spot) 1411.5 -1.62 -0.11%
Aluminium (London) 2593.00 28 1.09%
Copper (London) 9874.00 85 0.87%
Nickel (London) 28975.00 775 2.75%
Zinc (London) 2516.00 25 1.00%
RBA Cash Rate to be raised by 25bp (Mar) (%) 5.00 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.

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