IG Markets - Morning thoughts and opening prices

Good morning,

Markets maintained their positive run with another round of impressive US economic data helping sentiment. Housing starts jumped about 15% to a four-year high of 0.87 million, beating consensus of 0.77 million. Building permits also exceeded expectations, while corporate earnings from Bank of America impressed. Over in Europe, there wasn’t much on the calendar, but Spanish yields cooled after Moody’s reaffirmed Spain’s rating early in yesterday’s Asian session. This helped EUR/USD remain fairly well bid, rallying to a high of 1.314 before sidelining late in US trade. AUD/USD maintained a steady uptrend, consolidating around 1.03 before pushing to a high of 1.0389. Some positive moves in the commodities space helped support the AUD’s gains. Premier Wen Jiabao’s comments suggesting the economy remains in good shape have also lifted sentiment ahead of a swathe of data out of China today.

Ahead of the open, we are calling the Aussie market up 0.6% at 4557. This would see the local market print a fresh 15-month high with 4600 in sight. After the recent underperformance by the materials space, many feel this is the sector to watch going forward as it plays catch-up to the highs seen elsewhere in the market. Yesterday we saw glimpses of this with big gains for the likes of Fortescue Metals. A 2.5% advance in iron ore could see the big miners extend their gains today. Today is a key day for risk assets with data on tap out of China. We have China GDP, fixed asset investment, industrial production, retail sales and FDI set to hit the wires.

On a stock level, we expect a firmer start for BHP Billiton, with its ADR suggesting the stock will rise 2.5% to $34.28. A positive night for commodities is likely to drive resources higher at the open. However, we might see some consolidation ahead of the data releases from China. We will receive Newcrest Mining’s quarterly production report today along with releases from oil and gas companies Woodside and Santos. Bank of Queensland is set to announce its full-year earnings and the stock will be firmly in focus after recently making an adjustment to its provisions. In the media space, Ten will remain in focus after the Eye Corp news from yesterday. Ten is set to release its full-year earnings today. Supermarket giant Woolworths announces its first quarter sales numbers today.

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.

STAN SHAMU
Market Strategist
www.igmarkets.com.au

ENDS

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