IG Markets - Morning Thoughts

IG Markets - Morning Thoughts

Risk assets drifted higher ahead of the US presidential election. Equities in Europe gained despite some uninspiring economic releases and a looming Greece austerity vote. The positive momentum continued in US trade where equities also gained ground in a fairly quiet session. Most risk currencies were fairly range-bound apart from the Aussie dollar which experienced a sharp move following yesterday’s RBA rate decision. AUD/USD peaked at 1.04478 in US trade and remains firm heading into the Asian session. USD/JPY traded at a low of 79.96, but swiftly recovered as it found support at around 80 and printed a high of 80.45 in US trade.

Ahead of the open, we are calling the Aussie market up 0.5% at 4505. It will be all about elections today as results are expected to hit the wires as the day progresses. This will probably warrant some caution among most investors. There is still a probability that we won’t get a definitive result until tomorrow should key states be very close. Such a situation will probably prolong the conservative mood investors are currently in. An outright winner will probably be the most desirable outcome for markets. On the local economic front we only have the AIG construction index due out today.

On a stock level, we expect to see a firmer start for BHP Billiton with its ADR pointing to a 0.5% rise to $34.97. Commodities bounced back yesterday and this should support resource names today. Gold rallied back above US$1700 to a high of US$1721 and this could see local gold names outperform their mining peers. Oil names will also be in focus after crude enjoyed a sharp move higher which will be positive for energy names. It is Commonwealth Bank’s (CBA) turn to be under the spotlight today after releasing its September quarter trading update. CBA shares could test recent highs at $58.05 today. Newscorp (NWS) will also be in focus after releasing its first quarter earnings. Analysts were impressed by NWS’s results as its shares rallied in the US. A move back above $24 for the local stock could see it test October highs at $25.20.

Market Price at 8:00am AEST Change Since Australian Market Close Percentage Change
AUD/USD 1.0435 0.0011 0.11%
ASX (cash) 4505 20 0.45%
US DOW (cash) 13254 129 0.98%
US S&P (cash) 1429.7 12.9 0.91%
UK FTSE (cash) 5909 56 0.96%
German DAX (cash) 7415 61 0.83%
Japan 225 (cash) 9057 99 1.10%
Rio Tinto Plc (London) 31.86 0.41 1.30%
BHP Billiton Plc (London) 20.00 0.08 0.40%
BHP Billiton Ltd. ADR (US) (AUD) 34.97 0.16 0.47%
US Light Crude Oil (December) 88.41 2.85 3.33%
Gold (spot) 1716.6 31.2 1.85%
Aluminium (London) 1928 14 0.74%
Copper (London) 7737 58 0.76%
Nickel (London) 16168 182 1.14%
Zinc (London) 2176 41 1.91%
Iron Ore 120.3 1.00 0.84%

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.

www.igmarkets.com.au

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