IG Markets - morning thoughts and opening prices

IG Markets - morning thoughts and opening prices

In US trade, markets trimmed losses to finish the session relatively flat. They struggled early after some disappointing economic data, which showed consumer confidence missed expectations and business activity cooled. However, European markets pushed higher as Greece drew closer to a debt-swap agreement and the conclusion of an EU fiscal pact.

Among the major averages, the Dow Jones Industrial Average lost 0.2% to close at 12633. The S&P shed one point to close at 1312 and the NASDAQ added 0.1% to finish at 2814. Despite the slight hiccup this week, the S&P closed out the month with its best January performance since 1997.

Reflecting on the month we just closed out, the Aussie market finished with a 5.2% gain, its best January performance in 16 years. Most emerging markets like Egypt (+24% for January) also performed extremely well, indicating that risk appetite has vastly improved. Investors are increasingly comfortable buying dips, which is a very encouraging sign for risk assets. In the absence of a catalyst, it seems like markets will continue to consolidate after recent gains. We expect to see initial weakness in the resource space after a fairly tough night for commodities.

China’s Manufacturing PMI numbers could be a big turning point for markets in the region today. These numbers generally give a good indication of how resources are tracking and what policy action to expect from the world’s fastest growing economy. We expect to see initial weakness in the resource space after a fairly tough night for commodities.

Locally, traders can look out for house price index and new home sales data. However, this data is generally low impact. On the company front, Wesfarmers reports its sales numbers today with its Coles division likely to be in focus. Media stocks are also in for an interesting session after Gina Rinehart was reported to be eyeing a bigger stake in Fairfax. Ahead of the open, we are calling the Aussie market flat at 4264.

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

ENDS

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