IG Markets - Morning Prices September 21

We saw the negative risk tone from the Asian session continue into the European session and the start of US trade. Most of the major European bourses lost ground, also hurt by a round of uninspiring September PMI numbers. Spain had a successful bond auction but there was still a modest rise in Spanish bond yields. EUR/USD slid below 1.3 and dropped to a low of 1.292, but has since come off that low in-line with the recovery seen in US trade and will be retesting the 1.30 level soon. AUD/USD slid to 1.03675 and has also recovered and is now trading at around 1.044. Worse-than-expected unemployment claims helped set a negative tone early in US trade. Analysts at UBS attributed the recovery in the US session to a Financial Times report which noted that EU officials are working with the Spanish government behind the scenes for a new rescue programme for Spain. The strong bounce off support was seen across the risk space and US equities came off their lows to finish the session relatively flat.

Ahead of the open, we are calling the Aussie market up 0.1% at 4403. The positive opening call is thanks to the momentum seen into the close of US trade. It just seems like global markets are going through a bit of a consolidation phase at the moment. There is nothing major on the local economic front today but the Conference Board leading index might offer some direction on the economy. Overall, today is a bit light on the economic calendar front. Following China’s PMI number from yesterday, market participants will continue to monitor the wires for any comments by Chinese officials.

On a stock level, we expect a softer start for BHP Billiton with its ADR suggesting it will be down 0.3% at the open to $33.61. Oil bounced back and this might prompt a recovery in some of the energy names today. Gold and related stocks will also remain in focus as central banks remain prepared to act to stimulate the global economy. Graincorp has been upgraded to overweight (from neutral) by JP Morgan. Market participants should be on the lookout for some unusual stock moves on the back of index rebalancing.

Market Price at 6:30am AEST Change Since Australian Market Close Percentage Change
AUD/USD 1.0436 0.0047 0.45%
ASX (cash) 4403 6 0.14%
US DOW (cash) 13586 59 0.43%
US S&P (cash) 1457.9 5.8 0.40%
UK FTSE (cash) 5865 5 0.08%
German DAX (cash) 7401 59 0.80%
Japan 225 (cash) 9090 3 0.03%
Rio Tinto Plc (London) 30.78 -0.85 -2.67%
BHP Billiton Plc (London) 19.54 -0.46 -2.29%
BHP Billiton Ltd. ADR (US) (AUD) 33.61 -0.09 -0.27%
US Light Crude Oil (October) 92.89 1.50 1.64%
Gold (spot) 1768.8 6.3 0.36%
Aluminium (London) 2102 0 -0.01%
Copper (London) 8259 14 0.17%
Nickel (London) 17880 325 1.85%
Zinc (London) 2254 23 1.01%

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.

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