IG Markets - Morning Prices October 1

US and European equities lost ground on Friday despite Spanish bank stress tests coming in as expected. However, market participants remain on high alert with Moody’s decision on Spain’s rating still due. Moody’s already has Spain on negative watch, and one more downgrade would take the country into junk bond status. Also weighing on sentiment was a disappointing Chicago PMI print which came in at a contractionary 49.7, versus an expected 52.8. EUR/USD slid from around 1.296 all the way down to 1.284, while AUD/USD dropped from 1.047 to be currently trading at around 1.0353. With PMI numbers continuing to disappoint, risk sentiment has remained subdued with growth concerns heightening.

Ahead of the open, we are calling the Aussie market down 0.7% at 4357. Australia is set for a relatively quiet day of trading, with New South Wales having a bank holiday and school holidays limiting volume. Focus is going to switch to the RBA and what will happen with interest rates tomorrow. Current expectations are for no change in policy, but there has been a growing number of analysts in the 25 basis-point cut camp. Elsewhere in the region, we have China manufacturing PMI due out at 11am and expected to come in at 49.9. However, China will be closed this week for its Golden Week holiday.

On a stock level, we expect a mildly firmer start for BHP Billiton with its ADR suggesting the stock will be up 0.3% at $33.14. However, resource names are likely to struggle after Friday’s risk-off session. We have already seen risk currencies, particularly the Aussie, lose further ground this morning. China manufacturing PMI could be a key catalyst for how risk assets trade later in the session. Defensive names are likely to be in favour to kick off the new quarter. Ansell has completed the €101.5 million acquisition of Comasec after winning regulatory approval. The stock nudged through $16 on Friday and is trading at its highest level since 1998.

Market Price at 6:30am AEST Change Since Australian Market Close Percentage Change
AUD/USD 1.0353 -0.0106 -1.01%
ASX (cash) 4357 -30 -0.69%
US DOW (cash) 13420 -72 -0.53%
US S&P (cash) 1435.8 -10.5 -0.73%
UK FTSE (cash) 5740 -67 -1.15%
German DAX (cash) 7222 -115 -1.57%
Japan 225 (cash) 8839 -31 -0.35%
Rio Tinto Plc (London) 28.88 0.04 0.12%
BHP Billiton Plc (London) 19.26 -0.07 -0.34%
BHP Billiton Ltd. ADR (US) (AUD) 33.14 0.10 0.29%
US Light Crude Oil (November) 91.85 -0.48 -0.53%
Gold (spot) 1768.6 -13.1 -0.73%
Aluminium (London) 2112 4 0.19%
Copper (London) 8205 30 0.37%
Nickel (London) 18475 130 0.71%
Zinc (London) 2096 12 0.58%

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.

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