IG Markets - Morning Thoughts

IG Markets - Morning Thoughts

Overnight, European markets snapped their recent losing streak, edging higher on hopes that the EU was progressing the activation of its bailout fund, while US markets continued their post jobs report hangover.

US indices began their session in positive territory but drifted over the course of the afternoon to finish convincingly lower, courtesy of ongoing concerns over the global growth outlook and a series of earning downgrades from US corporates.

We are now in the midst of the US earnings season, with expectations running low given the global slowdown we have witnessed over the second quarter. While profit results are backwards-looking, analysts will be focusing on company’s future guidance. It is these forward-looking statements that have the market concerned, as they are expected to reveal slowing global demand for end user products and service.

Unfortunately, the local market looks set for another soft start with the ASX 200 currently called to unwind approximately 20 points or 0.5% lower at 4080. Overnight the USD continued to see safe-haven money flows with the dollar index hitting its highest levels since August 2010. This again resulted in weakness across the base metals and broader commodities complex and led to downwards pressure on materials and energy names. That thematic is set to play out in our market today with BHP’s ADR called down 1.1% at $30.88. That said, it is likely that losses today will be across the board, with perhaps some of the defensive sectors being relative outperformers.

We all know Europe is in the ‘dog house’, that China is slowing, and that the stalled US economy is likely to continue over the northern summer, perhaps even beyond the US Presidential elections in November, making it a very uninspiring time for equities. The current sideways shuffle could be with us for a number of months to come.

Market Price at 6:30am AEST Change Since Australian Market Close Percentage Change
AUD/USD 1.0190 0.0014 0.14%
ASX (cash) 4080 -19 -0.45%
US DOW (cash) 12653 -60 -0.47%
US S&P (cash) 1339.9 -7.6 -0.57%
UK FTSE (cash) 5638 10 0.18%
German DAX (cash) 6410 31 0.49%
Japan 225 (cash) 8855 -2 -0.03%
Rio Tinto Plc (London) 30.39 0.05 0.18%
BHP Billiton Plc (London) 18.27 0.04 0.19%
BHP Billiton Ltd. ADR (US) (AUD) 30.88 -0.34 -1.07%
US Light Crude Oil (August) 84.08 -0.80 -0.95%
Gold (spot) 1567.1 -18.5 -1.17%
Aluminium (London) 1909.875 -10 -0.51%
Copper (London) 7498.375 -54 -0.71%
Nickel (London) 16077.5 -234 -1.43%
Zinc (London) 1866.5 -6 -0.29%

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

ends

© Scoop Media