IG Markets - October 15

Markets were generally risk off on Friday as equities lost ground in US and European trade. Risk currencies also had a fairly tough session as AUD/USD slid from around 1.0289 to 1.0217 while EUR/USD dropped from 1.3 to 1.294. There was nothing specific driving markets lower as the losses were logged despite better than expected US data. Corporate earnings reports from JP Morgan and Wells Fargo were also fairly positive, coming in slightly better than expected. Over in Europe, market participants are exercising caution ahead of the October 18 meeting. However, the highlight from the weekend was better than expected economic date from China. China Trade Balance came out better than expected at $27.7 billion in September, versus consensus $20.7 billion and August's $26.7 billion. September exports grew 9.9%, nearly double the 5.0% expected.

Ahead of the open, we are calling the Aussie market down 0.2% at 4479. However, we could easily see the market trade flat at the open as we could get some upside gauging by the moves we’ve seen in the risk currency space. AUD/USD has gapped higher at the open, jumping to around 1.026 from below 1.024. The positive data out of China is likely to set the risk tone today as it fuels hopes of a recovery. Many still feel the strong recovery might not be sustainable. We also have CPI and PPI data due out of China at 11.30am Sydney time. We don’t have any major economic data due out locally. Elsewhere in the region, we have industrial production numbers due out of Japan.

On a stock level, we expect a softer start for BHP Billiton with its ADR suggesting the stock will be down 0.5% at $33.15. Commodities were broadly weaker on Friday but this might be neutralised by the positive data out of China. Brambles has been downgraded to neutral (from outperform) by Macquarie.

Market Price at 7:30am AEST Change Since Australian Market Close Percentage Change
AUD/USD 1.0245 -0.0027 -0.26%
ASX (cash) 4479 -8 -0.17%
US DOW (cash) 13324 -27 -0.20%
US S&P (cash) 1426.6 -8.3 -0.57%
UK FTSE (cash) 5792 -25 -0.42%
German DAX (cash) 7245 -27 -0.37%
Japan 225 (cash) 8544 1 0.01%
Rio Tinto Plc (London) 30.22 -0.50 -1.62%
BHP Billiton Plc (London) 19.36 -0.15 -0.77%
BHP Billiton Ltd. ADR (US) (AUD) 33.35 -0.19 -0.56%
US Light Crude Oil (November) 91.59 -0.68 -0.73%
Gold (spot) 1752.1 -17.1 -0.97%
Aluminium (London) 1994 -12 -0.58%
Copper (London) 8130 -69 -0.84%
Nickel (London) 17075 -533 -3.02%
Zinc (London) 1935 -35 -1.78%

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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