IG Markets Afternoon thoughts   7 May 2012

In US trade, markets declined amid another round of disappointing economic data. The US economy added 115,000 jobs in April, which was well below expectations of around 160,000 jobs added. Investors were also cautious ahead of a pivotal weekend in Europe with French and Greek elections taking place.

Among the major averages, the Dow Jones Industrial Average was down 1.3% at 13038. The S&P was 1.6% lower at 1369, whilst the NASDAQ shed 2.3% to finish at 2956.

Risk sentiment has taken a further hit this morning with risk currencies slumping following the developments out of Europe. With the Socialist Party winning elections in France and pro-bailout parties falling short in Greece, it seems we could see the situation unravel in Europe. Risk currencies have fallen sharply this morning in reaction to the news, with AUD/USD opening at around 1.0158 and EUR/USD testing 1.03, only to breach it shortly after. As a result, we expect to see a tough start to the week, with risk aversion the dominant theme. BHP’s ADR is pointing to a 1.7% drop to $35.43. The defensive sectors are likely to outperform but not by much, with a broad sell-off expected.

Ahead of the open, we are calling the Aussie market down 1.8% at 4317. This basically erases all of last week’s gains and leaves the market right near support from a few weeks ago. Several traders are likely to attempt buying this market after the sharp drop we have seen from last week’s high. However, trying to pick a bottom is always a particularly risky strategy, and following the trend might just be the favoured strategy. There is likely to be significant volatility in today’s session as traders look to reposition themselves. On the economic front, investors can look forward to building approvals and retail sales data at 11.30am. We will also have ANZ job ads and NAB business confidence data out at the same time. However, all this data is unlikely to influence today’s trading by much, with the European issues likely to take centre stage over the next few days.

Market Price at 8:30am AEST Change Since Australian Market Close Percentage Change
AUD/USD 1.0124 -0.0142 -1.38%
ASX (cash) 4317 -79 -1.80%
US DOW (cash) 12879 -321 -2.43%
US S&P (cash) 1352.1 -39.0 -2.80%
UK FTSE (cash) 5570 -174 -3.04%
German DAX (cash) 6415 -254 -3.81%
Japan 225 (cash) 9083 -297 -3.16%
Rio Tinto Plc (London) 32.15 -1.49 -4.42%
BHP Billiton Plc (London) 19.18 -0.79 -3.94%
BHP Billiton Ltd. ADR (US) (AUD) 35.43 -0.60 -1.67%
US Light Crude Oil (June) 96.18 -6.37 -6.21%
Gold (spot) 1640.3 5.5 0.33%
Aluminium (London) 2075 -21 -0.98%
Copper (London) 8194 -66 -0.79%
Nickel (London) 17592 21 0.12%
Zinc (London) 2105 11 0.51%

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

(IG Markets)

Add a comment

Bookmark and Share

News

Inspiring women recognised in 2017 Honours

31 Dec 2016 News
31 December 2016Some of New Zealand’s most inspiring women have been recognised in the 2017 New Year’s Honours list... more

New Zealand educators congratulated on NY Honours

31 Dec 2016 Education
31.12.16Education Minister Hekia Parata and Tertiary Education, Skills and Employment Minister Paul Goldsmith have congratulated the... more

Business

Solid growth for NZ despite fragile world economy

26 Dec 2016 Business News
The New Zealand economy continued to grow solidly in the September quarter, posting a higher than expected 1.1 per cent growth rate... more

WTO decision important for NZ beef and horticulture into Indonesia

23 Dec 2016 Business News
23 December 2016 Trade Minister Todd McClay today welcomed the World Trade Organization's (WTO) decision upholding New Zealand's... more

Living

3rd Position, Louis Vuitton America’s Cup World Series

21 Nov 2016 Lifestyle
Emirates Team New Zealand EMIRATES TEAM NEW ZEALAND CLOSES IN 3rd POSITION THE LOUIS VUITTON AMERICA’S CUP WORLD SERIES more

Arts Foundation Award recipients for 2016

14 Nov 2016 Lifestyle
The Arts Foundation Next generation of internationally acclaimed talent among the Arts Foundation Award recipients for 2016Under ... more

Property

NZ house prices gain 11% in October

14 Nov 2016 Property
Article - BusinessDesk Monday 14 November 2016 10:28 AM NZ house prices gain 11% in October, driven by sales of higher value homes By... more

RBNZ sees pressures building in Auckland construction sector

11 Nov 2016 Property By Paul McBeth
Article - BusinessDesk Thursday 10 November 2016 04:04 PM RBNZ sees pressures building in Auckland construction sector By Paul ... more

Migration

Good progress on investment attraction strategy

8 Dec 2016 Migration
Economic Development Minister Steven Joyce has welcomed news that New Zealand is attracting a higher level of quality international... more

Changes to Financial Markets Conduct Act impact UK pension transfers

1 Nov 2016 Migration
New Zealand Government Hon Paul GoldsmithMinister of Commerce and Consumer Affairs 1 November 2016 Changes to Financial Markets... more

Travel

Work on $700m Puhoi road underway

8 Dec 2016 Travel & Tourism
Hon. Simon Bridges 8 December, 2016 Prime Minister John Key and Transport Minister Simon Bridges have turned the sod on th... more

Air NZ teams up Ronan Keating, Julian Dennison for Christmas song

2 Dec 2016 Travel & Tourism
Air New Zealand has paired up with singer Ronan Keating and rising Kiwi actor Julian Dennison to rejig a Christmas classic. 'Summer... more

Sport

Broom to the rescue

31 Dec 2016 Cricket
29 Dec, 2016 In ShortA composed maiden ODI century from the recalled Neil Broom and an unrelenting bowling performance on a tough... more

Rugby World Cup 2019 marks 1,000 days to go ahead of big year of milestones

26 Dec 2016 Rugby
World Rugby and the Japan Rugby 2019 organising committee have been looking ahead to an important year of preparation as Rugby World... more

Columns

Gordon Campbell on the Gareth Morgan crusade

11 Nov 2016 Opinion
Column - Gordon Campbell   Gordon Campbell on the Gareth Morgan crusade First published on Werewolf more

Gordon Campbell on the US election outcome

10 Nov 2016 Opinion
Column - Gordon Campbell   Gordon Campbell on the US election outcome more

Kiwi Success

High Commissioner to India announced

8 Dec 2016 Appointments
Hon. Murray McCully 7 December, 2016 High Commissioner to India announced Foreign Minister Murray McCully today... more

Acting District Court Judge appointed

11 Nov 2016 Appointments
New Zealand Government Hon Christopher FinlaysonAttorney-General 11 November 2016 Acting District Court Judge appointed Wellington... more

Recruitment

NZ Government accepts recommendations on pay equity

8 Dec 2016 Recruitment
Hon. Paula Bennett,  Hon. Michael Woodhouse, Hon. Louise Upston 24 November, 2016 The Government will update the Equa... more

Fisher Funds hunts for new head to replace founder

2 Nov 2016 Recruitment
Article - BusinessDesk Tuesday 01 November 2016 04:42 PM Fisher Funds hunts for new head to replace founder Carmel Fisher By Paul ... more

s