IG Markets Morning Prices

Overnight, US markets were mixed but little changed as investors took a breather after several strong days of gains. While the Dow Jones Industrial Average managed to eke out a 12 point gain to finish 0.1% firmer the NASDAQ was down 0.4% and the S&P 500 fell 0.1% but still managed to hold above its 200-day moving average.

The pause should have come as no surprise, given the strong bounce in markets in recent days. The Dow for example had posted three consecutive sessions of triple-digit gains, the first such instance since back in December 2008.

While better-than-expected results from the likes of DuPont and Lockheed Martin continued the theme of a strong corporate recovery, the day's focus was clearly on consumer confidence, with the Conference Board's gauge suggesting consumer confidence fell to 50.4 in July from 54.3 in June. This was fractionally lower than the 51 the market had been expecting but was evidence that all the talk of a "double dip" recession in the US was weighing on consumer psyche.

In other economic news the Case-Schiller home price index suggested that home prices rose more than expected in May, building on the better-than-expected new home sales data earlier in the week and providing some glimmer of hope the housing market may be improving.

Locally, we're calling the market to unwind 19 points or 0.4% higher at 4516 with the financial sector once again expected to do a lot of the heavy lifting. The question will again be can we hold onto the 4500 level, yesterday was testament to the fact that given the recent strength of equities some are using the recent move to take profits.

Energy and commodity price were broadly lower and could see the materials and energy sectors in an arm wrestle with the financials for control of the market. Gold was a big underperformer losing ground as traders focused on vastly improving sentiment in the Euro-zone.

Without a doubt though, the big focus of the day will be the release of CPI data at 11.30am. Investors, consumers and homeowners will all be closely scrutinising the number with the general consensus being that a quarterly number of 0.8% or higher will make next week's RBA meeting a line-ball decision as to whether Australia gets another rate hike and sees its cash rate move to 4.75%. As it stands 8 out of 20 economists surveyed by Bloomberg expect a 25 basis point hike in August, this number will no doubt grow if we see CPI hotter than expected.

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