IG Markets: Morning Reports

Good morning

Overnight, US markets finished flat to marginally higher as investors continued to balance ongoing European issues against US economic data, confirming that the world’s biggest economy is on the slow path to recovery.

Among the major averages, the Dow Jones Industrial Average ended flat at 12415, the S&P added 0.3% to 1281, while the NASDAQ jumped 0.8% to 2669. Among the major S&P sectors, the financial and technology sectors finished higher, while materials and energy were among the day’s worst performers.

In European trade, a French debt auction of 10- to 30-year bonds saw yields edge higher, while concerns escalated about the ability of European banks to raise fresh capital after Italy’s biggest bank, UniCredit, could only do so at a massive discount to its prevailing price. These issues saw the euro fall below 1.28 to its lowest level since September 2010.

Across the pond in the US, economic data once again offered investors some encouragement. The ADP private sector jobs report suggested some 325,000 private sector jobs were created in December, much higher than the 176,000 that had been forecast. Weekly jobless claims also fell by more than expected, while planned layoffs at US firms fell 1.6% in December to their lowest levels since June, according to a report from consulting firm Challenger, Gray and Christmas. These three data points boosted expectations for tonight’s non-farm payrolls report, which is currently predicting a headline jobs creation figure of 155,000.

Turning to the local market, the ASX 200 is set to open marginally firmer today, with the benchmark index called to unwind 3 points or 0.1% higher at 4146. It is likely to be a mixed bag today, with financial names to possibly benefit from a strong session from their US counterparts, while the material and energy sectors will again likely be under pressure as a result of falling commodity prices. BHP’s ADR is suggesting the local stock will open 2 cents weaker at $35.80.

As is always the case on a ‘non-farms Friday’, trading (particularly at this time of the year) is likely to be quite subdued, with local investors preferring to wait and assess the reaction of the European and US markets to tonight’s employment data, before reacting on Monday.

Market Price at 8:30am AEST Change Since Australian Market Close Percentage Change
AUD/USD 1.0251 -0.0073 -0.71%
ASX (cash) 4146 3 0.07%
US DOW (cash) 12388 0 0.00%
US S&P (cash) 1278.0 3 0.24%
UK FTSE (cash) 5637 -23 -0.41%
German DAX (cash) 6113 12 0.20%
Japan 225 (cash) 8484 -4 -0.05%
Rio Tinto Plc (London) 33.21 -0.21 -0.63%
BHP Billiton Plc (London) 19.51 -0.24 -1.22%
BHP Billiton Ltd. ADR (US) (AUD) 35.80 -0.02 -0.06%
US Light Crude Oil (Feb) 101.50 -1.81 -1.75%
Gold (spot) 1622.0 7 0.43%
Aluminium (London) 2036.00 -29 -1.40%
Copper (London) 7540.00 0 0.00%
Nickel (London) 18675.00 -120 -0.64%
Zinc (London) 1833.00 -36 -1.93%
RBA Cash Rate to be decreased by 25bp (Feb) (%) 67.00 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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