IG Markets - Morning thoughts and opening prices

Good morning,

In US trade, markets rose following surprisingly strong US ISM manufacturing data, coming in above the upper end of expectations. Most of Europe was closed for the May Day holiday.

Among the major averages, the Dow Jones Industrial Average was up 0.5% at 13279. The S&P was 0.6% higher at 1406, while the NASDAQ added 0.1% to finish at 3050.

With most European markets closed, there are limited leads for the resource space this morning. However, risk sentiment was generally improved after the US finally posted some positive economic data after a pretty bad run. This helped oil climb around 1%, despite a slightly firmer US dollar. BHP’s ADR is pointing to a 1.6% gain at the open to $35.54. The Aussie dollar finally managed to halt its slide in the European session, with AUD/USD bottoming out at 1.03048. Following a sharp drop in the Aussie dollar yesterday, we expect to see pressure ease on manufacturing, tourism and retail stocks.

Ahead of the open, we are calling the Aussie market up 0.3% at 4441. The local market printed a high of 4448.5 yesterday following the RBA’s decision to cut interest rates by a surprise 50 basis points. This level is now key near-term resistance, as it also coincides with lows from June, July and August last year. The big banks will be in focus yet again today after ANZ Bank posted a 6% year-on-year rise in first half underlying profit to $2.97 billion. This was roughly in-line with consensus of $2.972 billion. The bank continues to deliver on earnings and has steadily improved the diversity of its funding base. Post the RBA decision, investors will be waiting to see how much of the cut the big banks will pass on. On the economic front, we have China’s HSBC final manufacturing PMI number due out at 12.30pm.

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.

Kind regards,
Stan Shamu
Market Strategist
IG Markets

www.igmarkets.com.au

ENDS

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