Global Markets Overview

It was a very quiet night for macro data, but that didn't stop the S&P moving higher on earnings speculations.

Everyone questions whether Alcoa is the mover and shaker it once was, but it is still a very good indicator of how the quarter or half has performed. Speculation was rife that earnings will move markets higher, particularly when we will see the banks reporting at the end of the week.

Reporting at the close of the US trading day, Alcoa didn't disappoint. First quarter earnings jumped 59%, beating estimates due to one-off benefits and cost savings, but disappointed on sales, as the company continues to evolve to counter the lower aluminium prices.

The lean mean fighting machine that most material companies are becoming is well and truly the mould now, and shows they are finding ways to cope with the changing landscapes. This result should bode well for the likes of Alumina, which has basically copied the Alcoa model over the past 12 months.

Earnings will be varied and volatile over the next few weeks, most eyes are on the likes of Wells Fargo, JPMorgan and Bank of America Merrill Lynch. If the banks can show credit growth over this period, then we may actually start to see real confidence returning to US markets, and that should have a flow-on effect.

The yen is again the centre of attention, as it continues to fall through every floor thrown at it. USD/JPY is now as its highest level since 2009 at ¥99.50, with parity expected to be reached over the next few days. Mr Ben Bernanke's speech this morning is unlikely to involve any form of stimulus talk, but more about maintaining stability and bank stress-testing, and should not devalue the USD.

The Nikkei is set for another day of being strapped to a rocket, with opening calls suggesting the index will add another 1.5% to be at 13412. More and more Japanese investors will be forced out of JGB (Japanese Government Bonds) as inflation picks up, creating negative real yields. A massive Japanese carry trade is now waiting to happen. This will mean positive movements in the Aussie dollar and the market, as Japanese yield-hunters search for returns outside JGBs.

Looking at the open, we are calling the ASX 200 up 17 points to 4922 (0.34%) as we follow global leads higher. Commodity prices were back on the winner's list, with all major players having positive prints. Iron ore was up a $1.70 to $137.60 and on the back of the new AUD/CNY tie-up, pure plays are in for a positive print. BHP's ADR is pointing higher, but only by two cents to $32.68, (0.07%); this light print is most likely due to a negative print in London. However, the fact that Citi group is believed to have brought a basket of iron ore plays yesterday, and JPMorgan upgraded its views on the sector, a north print in the space may actually be higher than this call as dividend payouts start hit investors wallets.

Ten Network is due to report just before market and it won't be a pretty result. Revenue is expected to drop around 25% to A$321.7 million (Goldman Sachs estimates), while NPAT could fall 60% to A$5.9 million. New CEO Hamish McLennan will outline a new strategy to improve its failing share of eyes on screens and methods to ramp up revenue share performance. Any positive rhetoric around the TV ad market outlook would see shorts covered, while the market will also be keen to hear about costs and cash flow.

All eyes are on China's CPI and PPI numbers today, however expectations are muted, and we would not expect them to have a major effect on the markets today as things like bird flu and the Korean Peninsula dominate Asian investment decisions.

Market	Price at 6:00am AEST	Change Since Australian Market Close	Percentage Change
AUD/USD	1.0411	0.0039	0.38%
ASX (cash)	4922	17	0.34%
US DOW (cash)	14624	82	0.56%
US S&P (cash)	1562.8	13.8	0.89%
UK FTSE (cash)	6308	27	0.43%
German DAX (cash)	7691	12	0.16%
Japan 225 (cash)	13428	225	1.70%
Rio Tinto Plc (London)	29.92	0.41	1.39%
BHP Billiton Plc (London)	18.78	-0.02	-0.09%
BHP Billiton Ltd. ADR (US) (AUD)	32.67	0.01	0.03%
US Light Crude Oil (May)	93.55	0.59	0.64%
Gold (spot)	1573.15	-3.8	-0.24%
Aluminium (London)	1893	4	0.19%
Copper (London)	7473	43	0.58%
Nickel (London)	16121	100	0.62%
Zinc (London)	1892	4	0.21%
Iron Ore	137.60	1.7	1.25%

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.

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