IG Markets - Morning Thoughts

IG Markets - Morning Thoughts

This week was always going to be a volatile one and thus far it’s playing out perfectly to script. Overnight we saw another seesawing performance for equities, with investors seemingly unsure how to position themselves heading into this weekend’s crucial and highly-anticipated Greek election.

With the major US indices closing lower between 0.6% and 0.9%, the leads for the local market today are poor. That said, the damage is likely to be relatively limited to the downside given the disappointing underperformance of our market yesterday, which booked a 0.2% decline in the face of 1.5% gains in the US As a result of our underperformance yesterday, we are only calling our market down 7 points, or about 0.2% at 4055.

With details of Spain’s bank recapitalisation plan still taking form, plus this weekend’s Greek election clouded in uncertainty, investors seem very much in a holding pattern, preferring to wait and see what the outcome is before recommitting capital to the market. Ahead of the weekend, you very much get the feeling that investors are squaring positions – ‘longs’ selling and ‘shorts’ buying, with no one wanting to be on the wrong side of a violent move next week. Bulls and bears seem to be evenly divided, hence the choppy trade we are currently experiencing, and it won’t be until more of a consensus views emerges that we get a more readily predictable direction for stocks.

The Greek election will undoubtedly be seen as a landmark event in history, as it goes to the core of Greece’s continuation in the eurozone and the fate of the region itself. Next week there will be just as many questions as answers, but an overall tone for prospects of Europe should be set heading into the second half of the year.

Until such a tone is set, equities are likely to continue to bounce around current levels with daily price action lacking any real conviction.

Market Price at 6:30am AEST Change Since Australian Market Close Percentage Change
AUD/USD 0.9951 0.0008 0.08%
ASX (cash) 4055 -7 -0.16%
US DOW (cash) 12479 -70 -0.56%
US S&P (cash) 1312.9 -8.4 -0.63%
UK FTSE (cash) 5452 -35 -0.63%
German DAX (cash) 6123 -59 -0.95%
Japan 225 (cash) 8550 -38 -0.44%
Rio Tinto Plc (London) 28.70 -0.10 -0.36%
BHP Billiton Plc (London) 17.89 -0.03 -0.15%
BHP Billiton Ltd. ADR (US) (AUD) 31.75 -0.17 -0.54%
US Light Crude Oil (July) 82.67 -0.24 -0.29%
Gold (spot) 1618.6 10.3 0.64%
Aluminium (London) 1961 -4 -0.22%
Copper (London) 7381 -5 -0.07%
Nickel (London) 17026 -196 -1.14%
Zinc (London) 1899 -2 -0.11%

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.

www.igmarkets.com.au

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