IG Markets - Morning Prices October 26

Good morning

Overnight, US markets edged higher in what was a volatile session that featured a mixed bag of earning reports, some better-than-expected economic data and rumours of a Fitch downgrade to the US credit rating.

US equities opened higher after several down days, but enthusiasm was quickly curbed by speculation that Fitch was about to issue a rating downgrade for the US. However, this rumour was quickly refuted by Fitch who drew the market’s attention to its July statement where it suggested it ’did not expect to resolve the negative outlook until late 2013‘.

On the economic front, weekly jobless claims fell to a seasonally adjusted 369,000, better than the 371,000 market consensus and down from last week’s 392,000. Elsewhere, pending home sales gained 0.2% in September, falling well short of consensus gains of 2.1%, while durable goods orders surged 9.9% surpassing estimates of 7.1%. In the UK, the preliminary Q3 GDP figures was also much stronger than expected, coming in at 1%, versus consensus estimates of 0.6%.

Turning to the local market, we’re looking at a slightly firmer start with the ASX 200 currently called to open 7 points or 0.15% higher at 4517. Apple’s result after the US closing bell, while creating half an hour of volatility have had little to no net impact on US futures and hence should not have much of an influence on this morning’s trade.

Once again, base metal prices were weaker overnight, continuing their poor recent run, as was crude oil which slipped 1.3% to $86.15. In relation to the bulks, iron ore continues to firm adding another 1.1% overnight to now be trading at $120 per tonne and this is seen as being a positive influence for the major miners with BHP’s ADR suggesting the local stock will open 12 cents, or 0.3% higher at 34.49.

As for the broader market, while a slightly higher open is on the cards, it has been a volatile week and the weekend is upon us. This is likely to see traders exerting caution today, probably not willing to take any major directional views on the market, particularly with the highly divided opinion over the outcome of the US Presidential elections and the upcoming RBA meeting.

Macquarie Group and AMP will be the local companies in focus today with earning results due out this morning.

Market Price at 7:30am AEST Change Since Australian Market Close Percentage Change
AUD/USD 1.0356 -0.0009 -0.09%
ASX (cash) 4518 8 0.17%
US DOW (cash) 13094 -41 -0.31%
US S&P (cash) 1409.4 -6.6 -0.47%
UK FTSE (cash) 5802 -7 -0.12%
German DAX (cash) 7204 -10 -0.14%
Japan 225 (cash) 9062 7 0.07%
Rio Tinto Plc (London) 31.00 -0.25 -0.81%
BHP Billiton Plc (London) 19.95 0.02 0.08%
BHP Billiton Ltd. ADR (US) (AUD) 34.49 0.12 0.36%
US Light Crude Oil (December) 86.05 -1.20 -1.38%
Gold (spot) 1712.1 5.1 0.30%
Aluminium (London) 1937 -1 -0.04%
Copper (London) 7824 7 0.09%
Nickel (London) 16182 -191 -1.17%
Zinc (London) 1836 -18 -0.97%
Iron Ore 120 1.30 1.10%

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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