IG Markets - morning thoughts and opening prices

IG Markets - morning thoughts and opening prices

US markets extended their gains overnight on a slew of positive news. On the European front, investors cheered news that Greece resumed negotiations with bondholders, plus reports that the IMF is looking to expand its lending fund by as much as $500 billion in a bid to safeguard economic growth. Some reports are suggesting the Greek government might have an agreement on a debt swap in the coming days. In the US, Goldman Sachs earnings smashed expectations, bucking the negative trend in earnings reported by its financial peers. Investors also embraced improving home-builder confidence figures.

Among the major averages, the Dow Jones Industrial Average climbed 0.8% to close at 12579. The S&P rose 1.1% to 1308 and the NASDAQ advanced 1.5% to 2770. The tech stocks were a standout after ASML Holdings (Europe’s largest semi-conductor company) forecast higher first quarter orders and circuit maker Linear Technology Corp’s sales beat projections.

The S&P remains in focus after closing at its highest level since 28 July 2011, above the key 1300 zone. This is also above the 76.4% Fibonacci retracement of the May to October sell-off at 1301. This opens the S&P up for further gains, with some chartists now targeting 1370.

With risk appetite improving, AUD/USD will be in focus today. The pair bounced off support at 1.036 yesterday and charged to a high of 1.04311 this morning. Today’s employment numbers, due out at 11.30am, might be the next key catalyst for the pair. The unemployment rate is expected to remain unchanged at 5.3% with 10,200 jobs added. An improvement on these numbers in the absence of bad news from China or the eurozone could trigger further gains for AUD/USD. Near-term resistance for the pair is at around 1.045.

BHP Billiton will continue to be in focus after having a big day yesterday. A break above $37.50 for the mining giant could help trigger further gains. The ADRs are suggesting it will open up 1.5% at $3754. Ahead of the open, we are calling the Aussie market up 0.6% at 4244.

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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