IG Markets - Morning thoughts and opening prices

IG Markets - Morning thoughts and opening prices

Risk assets had a strong session lifted by the Italian election results and solid US pending home sales data (+1.5% versus +1.1% expected). There is also growing confidence that central banks will do more to bolster global growth, particularly with the ECB and Fed in focus this week. EUR/USD marched higher and triggered a rally across the risk space as equities and commodities came to life. The single currency printed a high of $1.3117 and remains just shy of $1.3100. The next few days will be crucial for the single currency, as investors will scrutinise every piece of data available, and position themselves accordingly ahead of the ECB meeting. Later today we have German retail sales, consumer climate and unemployment change along with French consumer spending, Spanish GDP and the Italian unemployment rate. Investors will be hoping to see weak readings on that front to prompt the ECB into conducting some aggressive action. Meanwhile, US economic data continues to hit a sweet spot where it isn’t worryingly weak, but is weak enough to keep the Fed on its toes on the QE front. Additionally, inflation remains benign and this gives the Fed plenty of room for aggressive easing. With commodities recovering, AUD/USD charged to a high of 1.0355 and remains fairly resilient ahead of private sector credit data. USD/JPY briefly popped above 98 to a high of 98.20, but remains relatively range-bound at the moment. Perhaps Japan returning to trade today will have an impact on the pair and will provide some leads for the region. Today we get Japan’s manufacturing PMI, household spending, unemployment rate, industrial production and retail sales. China is out of action until Thursday.

Ahead of the open, we are calling the ASX 200 up 0.5% at 5153. This would see it break Friday’s peak of 5135 and bring the March high of 5164 into focus. With oil, gold and copper all posting solid gains, we expect to see the resource names enjoy some relief today. BHP’s ADR is pointing to a 0.2% gain to $32.61, with iron ore prices relatively flat. We are likely to see a bit more volatility in the gold/copper names which have come under significant pressure in recent times. The market has been eagerly awaiting ANZ’s first-half results which were released this morning and seem to be ahead of estimates. Investors will be focusing on the 73 cent interim dividend which is 7.4% ahead of consensus. However, some analysts feel this is because it’s more evenly split its first and second half dividend this time as opposed to it being more skewed to the second half in the past. On first blush, headline numbers look to be particularly strong, but it’s not just on the headline numbers that will impress - drilling down, ‘efficiencies’ ANZ have extracted will also drive share pick-ups. We’ll have to see if this result can lift the rest of the banking names higher today. ResMed came within a cent of its $4.65 all-time high yesterday and will be in focus again today following the break above $4.50 yesterday and its US listed stock rising 2%.

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.

www.igmarkets.com

ENDS

© Scoop Media