IG Markets Afternoon thoughts

IG Markets Afternoon thoughts

In US trade, markets shrugged off news of a Spanish downgrade and a weaker-than-expected US GDP print to finish the session higher. Investors instead focused on acceptable results from the Italian 5- and 10-year bond auction; strong US company earnings results and rising hopes that the Fed will usher in QE3 to support the sagging US economy.

Among the major averages, the Dow Jones Industrial Average was up 0.2% at 13228. The S&P was 0.2% higher at 1403, whilst the NASDAQ climbed 0.6% to finish at 3069.

Key commodities gained aided by a weaker US dollar, with copper rising 1.5%. BHP’s ADR is pointing to a 1% gain at the open to $35.24. The Aussie dollar surged on Friday, with AUD/USD breaking through 1.04 and rising to a high of 1.04750. The pair is still hanging at around those highs, with plenty of event risk on the way this week. National Australia Bank will be one to watch today after announcing the outcome of its UK banking strategic review. JB Hi-Fi will also be on the radar, with potential broker ratings changes after announcing yet another earnings downgrade last week. ResMed was one of last week’s best performers following its quarterly results, and the momentum might continue after it received some broker upgrades this morning.

Ahead of the open, we are calling the Aussie market up 0.8% at 4399. We could finally see the local market trade through 4400 today, after having failed to do so all of last week despite coming very close. Should we manage to break through this level, the October 28 high of 4417 will be the next level to keep an eye on. On the economic front, we have private sector credit and new home sales data due out. However, focus will remain firmly on tomorrow’s RBA interest rate decision. The data really ramps up tomorrow, with China manufacturing PMI also due out and expected to come in at around 53.6. Elsewhere in the region, Chinese and Japanese markets are closed for holidays today.

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.

Please contact IG Markets if you require market commentary or the latest dealing price.

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