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

A summer ‘gift’ for your boatie

19 Dec 2014 News
Helping your friends and family stay safe on the water this holiday season is the gift that lasts a lifetime, Associate Transport... more

Consultation starts on ACC rates for free doctors’ visits

19 Dec 2014 News
Health Minister Jonathan Coleman and ACC Minister Nikki Kaye say consultation starts today on ACC support towards free kids’... more

Business

NZ business confidence eases in December, still buoyant

19 Dec 2014 Business News
By Paul McBeth Dec. 19 (BusinessDesk) - New Zealand business confidence slipped in December, while staying largely upbeat, as... more

Xero's former chief revenue officer moves to Trade Me

19 Dec 2014 Business News
Article - BusinessDesk   Stuart McLean moves to Trade Me as Xero ditches chief revenue role By Suze Metherell Dec. 19 ... more

Living

New access system for Te Urewera

19 Dec 2014 Lifestyle
‘Hunters from throughout NZ and especially the North Island, will welcome the start of the new access system for Te... more

Fanzones for Auckland’s non-stop summer

19 Dec 2014 Lifestyle
Auckland will turn on a range of free activities this non-stop summer, with the Dick Smith NRL Auckland Nines Festival and Fanzone,... more

Property

Affordable housing development agreement signed

18 Dec 2014 Property
The Government has signed a development agreement for the construction of 237 homes as part of its affordable housing project on an... more

NZ weekly rents rise 5.3% in November, upward trend slowing

15 Dec 2014 Property
By Paul McBeth Dec. 15 (BusinessDesk) - Median national housing rents rose at an annual pace of 5.3 percent in November, slowing... more

Migration

Immigration rises to a fresh annual record

19 Dec 2014 Migration
Immigration rises to a fresh record, fuelled by returning kiwis, Indian students By Suze Metherell Dec. 19 (BusinessDesk) - New... more

UK pension service Britannia 'pauses' TV ads on FMA warning

19 Dec 2014 Migration
By Suze Metherell Dec. 19 (BusinessDesk) - Britannia Financial Services, a UK pension transfer agency whose advertisements feature... more

Travel

Air New Zealand takes out win on World's Top Ten Airlines

18 Dec 2014 Travel & Tourism
AirlineRatings.com has announced along with its Airline Excellence Awards its Top Ten airlines for 2015. Heading the list is... more

Tourism Holdings lifts annual profit forecast to $17 million

18 Dec 2014 Travel & Tourism
By Suze Metherell Dec. 18 (BusinessDesk) - Tourism Holdings, the biggest campervan rental company in Australia and New Zealand, has... more

Sport

Top local athletes to compete at Colgate Games in Wellington

19 Dec 2014 Sport
The Colgate Games, New Zealand’s biggest annual children’s track and field athletics event, will be held in... more

Badminton Names Bulk of Junior Team for Oceania Champs

19 Dec 2014 Sport
For a number of New Zealand’s brightest young Badminton prospects Christmas and the New Year holiday period just got a little... more

Columns

Gordon Campbell on the Pakistan schoolchildren killings

18 Dec 2014 Column
by Gordon Campbell The slaughter of the children in Pakistan is incomprehensibly awful. On the side, it has thrown a spotlight onto... more

Gordon Campbell on income inequality, and Christmas songs

12 Dec 2014 Column
Article - Gordon Campbell   Gordon Campbell on income inequality, and yo ho ho Christmas songs by Gordon Campbell As 2014... more

Kiwi Success

DreamCatchers launched in UK

18 Dec 2014 People
In association with Kea, The New Zealand High Commission and The New Zealand Society, Dream Catchers was launched at New Zealand House... more

Inspiring Stories :Young Kiwis Making a Difference

8 Dec 2014 People
Wellington, December 8th – At only 15 years old, Auckland student Hunter Williams is the youngest winner of the Inspiring... more

Recruitment

Job ads trending down, says ANZ survey

19 Dec 2014 Recruitment
By Fiona Rotherham Total job advertising has taken an end-of-year dip, falling 0.1 per cent in November after seasonal adjustments,... more

Scheme to fill hard-to-staff health jobs working

18 Dec 2014 Recruitment
Health Minister Jonathan Coleman says a scheme to fill hard-to-staff health roles is making a real difference to the career choices... more