Morning thoughts and opening prices 9/3/12

In US trade, markets rallied in a massively risk-on session. Risk sentiment was greatly improved by reports that Greece was nearing a debt swap agreement with a large enough percentage of private holders to avoid a messy default. Sentiment was also lifted by some relatively hawkish comments from the ECB and stronger-than-expected German economic data.

Among the major averages, the Dow Jones Industrial Average was up 0.6% at 12908. The S&P was 1% higher at 1366 and the NASDAQ advanced 1.2% to finish at 2970.

Greece is reported to have achieved approximately 90% participation from private investors in the bond swap. It seems like the final figure will be around 95%, which is a fantastic result for markets. Commodities enjoyed modest gains, which is likely to translate to a firmer open in the resource space. BHP’s ADR is pointing to a 1.3% gain at the open. Industrial names are also poised for gains after their US peers rallied. Following the conclusion of the Greek debt swap and the ECB comments, we also expect to see the financial sector firmer.

Ahead of the open, we are calling the Aussie market up about 0.7% at 4200. This sees the local market open right near the previous uptrend support line, which has since turned into resistance. It will be interesting to see if the bulls will have enough conviction to break through this line. Today is a big day on the economic front, with plenty of local and regional data on the cards. Locally, we have trade balance figures due out at 11.30am. Elsewhere in the region, we have China’s CPI, PPI, fixed asset investment, industrial production and retail sales numbers due out. As a result, we expect an exciting finish to the week with plenty of event risk drivers on the way.

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.

ENDS

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