IG Markets - morning thoughts and opening prices

IG Markets - morning thoughts and opening prices

US markets flew out of the gates overnight, on the back of strong leads from yesterday’s Asian session in a broadly ‘risk on’ environment. Sentiment was also lifted early by some strong economic numbers out of Europe and the US. However, stocks drifted lower towards the end of the session as the market digested some underwhelming earnings reports in the banking space.

Among the major averages, the Dow Jones Industrial Average climbed 0.5% to close at 12482. The S&P rose 0.4% to 1294 and the NASDAQ advanced 0.6% to 2728. Disappointingly, the S&P retreated from its early highs above 1300. From a technical perspective, this is a key level the bulls need to overcome and a close above 1300 would be encouraging.

Yesterday’s China numbers hit the sweet spot, as they topped estimates without extinguishing prospects for more monetary easing. This was largely cheered by markets, and resulted in broad gains in the commodities space overnight. Commodities were also lifted by a US Empire State manufacturing index report, showing manufacturing in the New York region expanded at the fastest pace in nine months. On the European front, German investor confidence also impressed.

Locally, the resource space will be one to watch today, following yesterday’s solid production reports from Fortescue Metals and Rio Tinto. BHP Billiton has released its quarterly production report this morning, and at first glance it seems the numbers are largely positive with iron ore production rising to a record level. We are likely to see the brokers start to react to these figures shortly. Ahead of the open, we are calling the Aussie market down 0.2% at 4205. This is mainly due to the pullback we saw in US markets. However, momentum seems to be to the upside after yesterday’s strong run into the close. On the economic front, we have Westpac consumer sentiment and new motor vehicle sales numbers due out this morning.

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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