IG Markets - Morning Thoughts

IG Markets - Morning Thoughts

Risk assets gained ground on Friday with sentiment lifted by headlines that the ECB is considering setting yield band targets under a new bond-buying programme. The news story prompted an aggressive round of euro buying after having been under pressure early in US trade. New that the ECB will wait for the German constitutional court ruling on the ESM before finalising its bond-buying programme had kept the euro and other risk assets subdued. EUR/USD bounced back to stay above 1.25, while AUD/USD reclaimed the 1.04 level. Elsewhere, the Fed released a letter from Chairman Ben Bernanke to a Republican Congressman, defending the Central Bank's policy actions and noting that there is ‘scope for further action’ should the Fed deem as necessary ‘after weighing the cost and benefits’.

Ahead of the open, we are calling the Aussie market up 0.4% at 4368. We have seen risk currencies hold their ground near Saturday morning’s close, so it does seem like we’ll have a positive start to the week. Speculation that China will announce some stimulus measures is likely to ramp up after Premier Wen Jiabao said China needs measures to promote export growth. There isn’t anything significant on the economic calendar to look out for today. However, we might continue to get some broker ratings changes after the swathe of company earnings reports posted last week.

On a stock level, we expect a softer start for BHP Billiton, with its ADR pointing to a 0.1% rise to $33.19. Comments from BHP’s CEO Marius Kloppers that the company sees long-term price declines for its commodities are likely to make the rounds today. On the reporting front, today we have Caltex, Toll holdings and Billabong to look out for. There are a number of companies going ex-dividend today including Suncorp, Woodside, Coca-Cola and Ansell. Gold stocks are likely to remain in focus as QE talk ramps up and the precious metal secured its biggest weekly gain since January. Troubled media company Fairfax will be one to watch with some reports suggesting the company’s shareholders are likely to push for some asset sales.

Market Price at 6:30am AEST Change Since Australian Market Close Percentage Change
AUD/USD 1.0424 0.0002 0.02%
ASX (cash) 4368 19 0.44%
US DOW (cash) 13181 111 0.85%
US S&P (cash) 1415.1 9.8 0.69%
UK FTSE (cash) 5771 1 0.02%
German DAX (cash) 6974 17 0.25%
Japan 225 (cash) 9118 47 0.52%
Rio Tinto Plc (London) 29.10 -0.47 -1.58%
BHP Billiton Plc (London) 19.34 -0.26 -1.34%
BHP Billiton Ltd. ADR (US) (AUD) 33.00 -0.09 -0.26%
US Light Crude Oil (October) 96.63 0.95 0.99%
Gold (spot) 1671.8 6.8 0.41%
Aluminium (London) 1918 31 1.64%
Copper (London) 7660 42 0.55%
Nickel (London) 16491 249 1.53%
Zinc (London) 1971 34 1.75%

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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