IG Markets - Morning Thoughts

IG Markets - Morning Thoughts

On Friday, the major US indices, with the exception of the NASDAQ, finished modestly higher. This occurred after a better-than-expected non-farm payrolls report and amidst ongoing political posturing over the fiscal cliff. Friday’s gains allowed both the Dow and the S&P to book weekly advances, while NASDAQ losses for the week topped 1% courtesy of Apple recording its worst weekly decline since May 2010.

The day’s major economic highlight was no doubt the November non-farm payrolls report, which suggested 146,000 jobs were created, well ahead of consensus estimates of 93,000, with the unemployment also falling to 7.7% from 7.9% previously. However, as is always the case with this report, there is an unfortunate ‘smoke and mirrors’ aspect to it. October’s print of 171,000 was revised down to 138,000, while the participation rate came in at 63.6%, a fresh 30-year low, thus masking the true extent of the US unemployment predicament.

European markets finished mixed as Germany’s Central Bank cut its growth forecast for the European powerhouse next year, another sure sign the German economy is slowly being dragged down by the rest of Europe. European markets also seem to be recalibrating their outlook for the euro after the ECB revised lower both growth and inflation outlooks for the region on Thursday, paving the way for more easing and causing the euro to retreat further from the 1.30 level.

Turning to the local market, the ASX 200 is set to begin the new trading week on the front foot, with the benchmark index called seven points or 0.15% higher at 4558. The small expected gain builds on last week’s advance of 1%. The focus of today’s trading is likely to fall heavily on China. Over the weekend a broad range of economic measures were released including fixed asset investment, industrial production, retail sales and CPI, all of which were broadly in-line or marginally ahead of expectations. Continuing on the Chinese economic data theme, we have trade balance numbers due out around midday (ADET), which are expected to reveal another healthy surplus of US$26 billion with monthly export/import growth of 9% and 2% respectively. This figure will no doubt set the tone for resource names heading into the afternoon. To begin the day though, it’s likely to be a relatively muted start with a slight upside bias.

Market Price at 8:00am AEST Change Since Australian Market Close Percentage Change
AUD/USD 1.0487 0.0007 0.07%
ASX (cash) 4559 7 0.16%
US DOW (cash) 13157 81 0.62%
US S&P (cash) 1421.2 3.4 0.24%
UK FTSE (cash) 5923 9 0.15%
German DAX (cash) 7528 -33 -0.44%
Japan 225 (cash) 9552 -7 -0.07%
Rio Tinto Plc (London) 32.56 0.19 0.59%
BHP Billiton Plc (London) 20.17 0.04 0.19%
BHP Billiton Ltd. ADR (US) (AUD) 34.77 0.03 0.08%
US Light Crude Oil (January) 85.98 -0.58 -0.66%
Gold (spot) 1704.65 1.1 0.06%
Aluminium (London) 2094.00 3 0.12%
Copper (London) 8035.00 23 0.29%
Nickel (London) 17225.00 7 0.04%
Zinc (London) 2028.00 3 0.15%
Iron Ore 121 2.60 2.20%

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

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