IG - Morning Thoughts And Opening Prices December 30, 2014

IG - Morning Thoughts And Opening Prices December 30, 2014

Greece heading to elections
The main headline from overnight trade was Greece’s failure to elect presidential nominee Stavros Dimas in its final attempt. After two failed attempts, yesterday was parliament’s last chance to elect him as president before being forced into an early election. Having failed yet again, the country will be headed back to the polls as early as January 25. An election puts all sorts of doubt on the future of the bailout agreement given anti-austerity party Syriza is currently leading the polls. While Greek equities slumped, the reaction in the euro and the rest of the region wasn’t quite as bad. Potentially markets had already priced this in but I would still remain cautious around Greece. EUR/USD printed a new low of $1.2143 and remains quite vulnerable at the moment. This was the pair’s lowest level since July 2012. That same month the pair traded down to $1.2043 and that’s potentially a near term target for the pair.

Greenback remains resilient

Apart from Greece which slumped significantly, markets were generally choppy elsewhere with USD strength remaining a key theme. In fact, the AUD was one of the few currencies that managed to regain some ground against the greenback and that was mainly due to the strength that was coming through from China yesterday. AUD/USD traded as high as $0.8163 but has since started drifting again and I suspect it’ll continue to knock on the $0.8100 support. Meanwhile USD/JPY is nudging higher, back towards ¥121.00, and is retesting last week’s highs at the moment. The Nikkei was a surprise underperformer yesterday and could be in for a bounce today.

Flat start for ASX 200

Ahead of the open we are calling the ASX 200 a touch firmer at 5480. As of yesterday’s close, the market is up 2.35 for the calendar year. We saw incredible momentum yesterday and it’ll be interesting to see if this can continue given the uncertainty presented by Greece. China was a key driver of the gains yesterday and given it reversed the majority of its gains, this could present some challenges for the region. The bounce in iron ore prices might help the materials names continue their strength from yesterday. However, if China’s rally stalls and if this impacts iron ore futures then it won’t be long before we see this reversed. Oil’s brief recovery failed to keep going and this will put energy names under pressure. In the banking space, CBA traded above $86 yesterday and is at fresh record highs. Investors will feel uneasy about pushing the stock much higher from these levels, perhaps buying the dips will be a preferred strategy.

Asian markets opening call

Price at 8:00am AEDT Change from the Offical market close Percentage Change
Australia 200 cash (ASX 200) 5,487.70 14 0.25%
Japan 225 (Nikkei) 17,734.00 113 0.64%
Hong Kong HS 50 cash (Hang Seng) 23,803.00 30 0.13%
China H-shares cash 12,050.20 30 0.25%
Singapore Blue Chip cash (MSCI Singapore) 381.50 0 0.12%
US and Europe Market Calls Price at 8:00am AEDT Change Since Australian Market Close Percentage Change
WALL STREET (cash) (Dow) 18,060.00 -27 -0.15%
US 500 (cash) (S&P) 2,092.05 2 0.08%
UK FTSE (cash) 6,616.60 -10 -0.15%
German DAX (cash) 9,927.60 -13 -0.13%
Futures Markets Price at 8:00am AEDT Change Since Australian Market Close Percentage Change
Dow Jones Futures (December) 18,062.00 -26.00 -0.14%
S&P Futures (December) 2,087.00 1.00 0.05%
ASX SPI Futures (December) 5,448.00 -21.00 -0.38%
NKY 225 Futures (December) 17,828.00 0.00 0.00%
Key inputs for the upcoming Australian trading session (Change are from 16:00 AEDT) Price at 8:00am AEDT Change Since Australian Market Close Percentage Change
AUD/USD $0.8132 0.0004 0.05%
USD/JPY ¥120.660 0.160 0.13%
Rio Tinto Plc (London) £29.75 0.88 3.03%
BHP Billiton Plc (London) £14.05 0.36 2.63%
BHP Billiton Ltd. ADR (US) (AUD) $29.62 -0.07 -0.22%
Gold (spot) $1,183.34 -11.26 -0.94%
Brent Crude (January) $58.00 -2.00 -3.33%
Aluminium (London) 1863.5 -3.25 -0.17%
Copper (London) 6255 -57.25 -0.91%
Nickel (London) 15054 -239.00 -1.56%
Zinc (London) 2139 -20.75 -0.96%
Iron Ore (62%Fe Qingdao) $68.71 1.37 2.03%

IG 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.

STAN SHAMU

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