IG Markets - Morning Prices March 13

In US trade, markets were relatively mixed, as investors remained cautious on Chinese growth concerns. Investors are also apprehensive ahead of the FOMC meeting and US retail sales data. Following the vast improvement we have seen in US economic data recently, some analysts feel we could see a significant shift in the Fed’s stance on easing. As a result, the meeting has the potential to be a key event for markets this week.

Among the major averages, the Dow Jones Industrial Average was up 0.3% at 12960. The S&P was flat at 1371 and the NASDAQ fell 0.2% to finish at 2984.

Chinese growth concerns sent commodities lower, with a 0.5% fall for economic growth bellwether copper. Commodity currencies also dropped, with AUD/USD dropping to as low as 1.0473 before a slight recovery. Given the weakness in commodities, the resource sector is likely to struggle at the open today. Should the softness we are witnessing in the Aussie dollar continue, we could start seeing an improvement in some of the currency-sensitive stocks which have been under pressure from a strong AUD. Macquarie Group will be in focus today after Fitch downgraded its outlook for MQG. Fitch warns that returns for a number of MQG’s units are likely to remain subdued.

Ahead of the open, we are calling the Aussie market up about 0.3% at 4209. The local market has struggled at around 4215 over the past few sessions, and in the absence of a catalyst it will be difficult to see it break that level. We are likely to see the market remain in a holding pattern, as investors continue to digest the China deficit news and ahead of the FOMC meeting. Any change to the Fed's wording in the statement could be a major market mover. On the economic front, today we have home loans and NAB business confidence data due out.

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