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

NZ PM John Key Holds Emergency Press Conference In Wellington

30 Aug 2014 News By Jeremy Wilkinson
August 30 National’s senior Minister Judith Collins has resigned from Cabinet because of serious allegations she tried to... more

New Zealand’s biggest problems are Economic Issues

29 Aug 2014 News
Roy Morgan Research New Zealand’s biggest problems are Economic Issues (41%) while the World’s most important problems... more

Business

Fonterra credit rating cut by S&P, Fitch affirms rating

29 Aug 2014 Business News By Paul McBeth
  Fonterra credit rating cut by S&P over Beingmate deal, Fitch affirms rating Aug. 29 (BusinessDesk) - Fonterra Cooperative... more

Christchurch property investor wins policy appeal in Supreme Court

27 Aug 2014 Business News
Article - BusinessDesk   Christchurch property investor Ridgecrest wins IAG policy appeal in Supreme Court By Jonathan ... more

Living

Two NZ composers in Danish international live concert

29 Aug 2014 Lifestyle
Aarhus Festival Death Lines - a Memento Mori Collection Performances from five cities around the world –... more

Entries open The Hobbit Fan Fellowship Contest

26 Aug 2014 Lifestyle
Air New Zealand Air New Zealand invites Hobbit fans to enter The Hobbit Fan Fellowship Contest for a chance to win a ... more

Property

House sales down as winter cools market - REINZ

14 Aug 2014 Property
New Zealand house sales fell in July as winter cooled the appetite of house hunters while a drop in properties selling for $400,000... more

NZ property values rise at slowest annual pace in 13 months

7 Aug 2014 Property By Paul McBeth
Aug. 7 (BusinessDesk) - New Zealand property values rose at the slowest annual pace in 13 months in July as rising interest rates,... more

Migration

Who's living next door to you?

20 Aug 2014 Migration
Statistics NZ puts out detailed data on different ethnic groups, down to the 108 people from the Isle of Man. Did you know there are... more

NZ population growth speeds up

14 Aug 2014 Migration
New Zealand's climb to 4.5 million people has been faster in the past year than it has in any other year in the past decade,... more

Travel

Jetstar loses ground in NZ as Qantas plunges to A$2.84B loss

28 Aug 2014 Travel & Tourism By Paul McBeth
Aug. 28 (BusinessDesk) - Jetstar, the discount unit of Australian airline Qantas Airways, lost ground in New Zealand, while claiming... more

Auckland 10th most liveable city - again

19 Aug 2014 Travel & Tourism
Auckland has again been ranked the tenth most liveable city in the world. The Economist Intelligence Unit (EIU) has released its... more

Sport

Rugby: Ranfurly Shield returns to Napier

30 Aug 2014 Rugby By Campbell Burnes
Rugby: Ranfurly Shield returns to Napier By Campbell Burnes at ECOLight Stadium more

A Mixed Day for the Kiwis at World Champs

29 Aug 2014 Equestrian
Equestrian Sports New Zealand A Mixed Day for the Kiwis at World Champs New Zealand eventer Tim Price sits in fourth place at the end... more

Columns

Relax, nothing is under control... the Holistic Helper's guide to dealing with the unexpected

29 Aug 2014 Column By Tricia Alach
As regular readers of this column already know, I am a bit of a fan when it comes to change. Evaluating your life, deciding how you... more

Gordon Campbell on leaders debate and Judith Collins

29 Aug 2014 Opinion By Gordon Campbell
  Gordon Campbell on last night’s debate, and the Collins accusation Debating is a peculiar discipline in that what you... more

Kiwi Success

The duo behind NZ's hottest new label

20 Aug 2014 People
We're expecting big things from Harman Grubisa, the new label from Auckland-based friends Madeleine Harman (right) and Jessica... more

Victoria announces new strategic appointments

11 Aug 2014 Appointments
Victoria University of Wellington has announced the appointment of New Zealand’s first Provost, Professor Neil... more

Recruitment

High dollar, hands-off Govt sends workers to dole queue

22 Aug 2014 Recruitment
The loss of up to 100 jobs at Croxley stationery in Auckland is devastating news for their families and the local Avondale... more

On track to surplus, more jobs, higher incomes

19 Aug 2014 Recruitment
New Zealand is on track to Budget surplus this year, backed by good growth, more jobs and higher incomes under the ... more