IG Markets - Morning Prices Jan 23

US markets gained ground on Friday night, with strong earnings from IBM and Microsoft boosting markets. However, European markets snapped their four-day winning streak on a lack of a solution in the Greek debt negotiations. Optimism had been growing that Greece was close to a solution at the end of last week.

Among the major averages, the Dow Jones Industrial Average climbed 0.8% to close at 12721. The S&P rose 0.1% to 1315, but the NASDAQ fell 0.1% to 2787. Microsoft shares surged over 5% and IBM shares climbed over 4%.

Most of the Asian region is closed for trading today, as countries celebrate the Chinese New Year. As a result, we expect a fairly quiet session for the region with holidays for China, HK, Indonesia, Korea, Malaysia, Philippines, Singapore, and Taiwan. Investors will continue to monitor the European situation closely, with Greek debt restructuring talks remaining a cliff hanger. There was also progress on the ‘fiscal compact’, with finance ministers set to discuss the latest draft at the Eurogroup and Ecofin meetings early this week.

Based on Saturday’s close for the futures, the Aussie market is pointing towards a flat start at 4239. However, risk currencies have opened with a slightly negative bias this morning, on disappointment regarding the Greek debt negotiations. This could give the opening call some downside once the futures re-open. On the economic front, we have quarterly PPI data due out at 11.30am. There is also CPI data on Wednesday which carries more impetus for AUD/USD The pair broke above the downtrend line which had been in place since July last year, and looks like it is in a strong position to extend its gains.

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