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IG Markets - morning thoughts and opening prices
IG Markets - morning thoughts and opening prices
US markets lost ground on Friday night with fears of a Greek default weighing on markets. Also dominating headlines was news that France and other euro nations received ratings cuts from S&P. However, this was widely expected and had been flagged a while ago. Most investors are waiting to see what the implications of a French downgrade will be for the EFSF.
Among the major averages, the Dow Jones Industrial Average retreated 0.4% to close at 12422. The S&P lost 0.5% to 1289 and the NASDAQ fell 0.5% to 2711.
Although the downgrades by S&P are a cause for concern, it is unlikely that this will be the main market mover today. How European leaders will react to the downgrades going forward will take centre stage. Investors will also be looking out for the US reporting season, with around 25% of S&P 500 companies set to report their results.
There is growing risk of a disorderly default by Greece, with talks reportedly breaking down after private sector creditors could not agree on the coupon level of fresh bonds. With a €14.4 billion bond repayment due in March, and without restructuring in place, the entire sum would fall, making it increasingly likely that Greece will default.
Based on Saturday morning’s close for the futures, we are calling the Aussie market down 0.1% at 4191. However, risk currencies opened a touch weaker this morning, indicating that the equity market might be in for a tough start. We could see some caution being exercised in the Asian session, as investors wait to see the reaction to the downgrades in European trade. The US is on holiday today for Martin Luther King Day. On the economic front, traders will be looking out for ANZ job ads and home loans data due out at 11.30am.
| Market | Price at 8:30am AEST | Change Since Australian Market Close | Percentage Change |
| AUD/USD | 1.0292 | -0.0029 | -0.28% |
| ASX (cash) | 4191 | -5 | -0.12% |
| US DOW (cash) | 12451 | -22 | -0.18% |
| US S&P (cash) | 1294.0 | -3 | -0.23% |
| UK FTSE (cash) | 5654 | -34 | -0.60% |
| German DAX (cash) | 6155 | -68 | -1.09% |
| Japan 225 (cash) | 8455 | -45 | -0.53% |
| Rio Tinto Plc (London) | 35.61 | 0.13 | 0.37% |
| BHP Billiton Plc (London) | 20.45 | -0.10 | -0.49% |
| BHP Billiton Ltd. ADR (US) (AUD) | 36.30 | -0.30 | -0.82% |
| US Light Crude Oil (Feb) | 99.03 | -0.90 | -0.90% |
| Gold (spot) | 1639.0 | -2 | -0.12% |
| Aluminium (London) | 2145.00 | -18 | -0.83% |
| Copper (London) | 8000.00 | -5 | -0.06% |
| Nickel (London) | 19600.00 | -70 | -0.36% |
| Zinc (London) | 1960.00 | -7 | -0.36% |
| RBA Cash Rate to be decreased by 25bp (Feb) (%) | 72.00 | 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.
www.igmarkets.com.au
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