IG Markets - Morning Prices Nov 30

US markets were mostly higher overnight after consumer confidence data came in significantly ahead of expectations. The consumer confidence reading climbed to 56 from a previous figure of 40.9. The reading shows that consumers grew more optimistic about jobs and income prospects. In Europe, Italy’s bond auction failed to impress, but investors remained optimistic ahead of the eurozone finance ministers’ meeting.

Among the major averages, the Dow Jones Industrial Average added 0.3% to end at 11556. The S&P climbed 0.2% to 1195, while the NASDAQ lost half a percent to close at 2516. Investors were encouraged by comments from Fed Reserve Vice Chairman Janet Yellen who said the central bank has leeway to spur the US recovery and reduce unemployment by purchasing more assets and clarifying its plan to sustain record-low borrowing costs.

It seems investors are cautiously optimistic that eurozone officials will come up with a plan and garner the necessary resources to head off the debt crisis. Risk assets enjoyed modest gains overnight, with some commodities benefitting from the improved US consumer confidence. Oil advanced 1.5%, while the metals were mixed. Gold was up 0.4%, copper was flat and nickel lost ground. The Aussie dollar will be in focus after AUD/USD rallied back above parity overnight.

Following the mixed leads and the pullback we saw in US markets into the close, we are calling the Aussie market relatively flat at 4103. Investors are likely to remain cautious given the importance of the eurozone finance ministers’ meeting. On the economic front, traders will be looking out for new home sales, private capital expenditure and private sector credit data due out at 11.30am. This could give a better indication of what the RBA might do with interest rates next week and could also be a catalyst for the Aussie dollar.

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