Market expectations: Market leads to flat trading

The Australian stock market is seen receiving a little shove from the negative leads over volatile overnight sessions in the US and European stock markets. The ASX is seen performing modestly on Friday.

UPDATE From IG MArkets Analyst Ben Potter:

"In the US overnight, stocks staged a huge rally off the lows after news broke that the EU and IMF had approved a five year Greek austerity plan which included additional rounds of tax hikes and spending cuts. European and US stocks, as well as the EUR/USD were under huge amounts of selling pressure early.

"The technology-laden NASDAQ was the standout performer, adding 0.7%. Elsewhere, the S&P 500 and Down Jones Industrial Average finished 0.3% and 0.5% lower respectively, with the S&P 500 down 1.8% at one stage. The S&P 500 bounced off both the 200 moving average as well as the long-term uptrend, both very important technical levels.

"Locally, the ASX 200 is called to open the session unchanged at 4499 following the late session surge on Wall Street. In terms of sectors, the energy, financial and consumer staples were the hardest, losing 1.1%, 1% and 0.9% respectively.

"Energy names locally are likely to be hit after the US Department of Energy released 30 million barrels from the Strategic Petroleum Reserve which saw crude oil futures slump 2.5% to US$91.80/bbl since our 4.30pm close. ExxonMobil, Chevron and ConocoPhillips were all down more than 0.4%.

"Financials were under pressure too as the likes of Bank of America, JPMorgan, Wells Fargo and Citigroup were all down more than 0.3%.

The materials sector finished relatively unchanged and could have some upside risk in Australian trade despite softer leads. Base metals on the LME were mixed while in London, Rio and BHP were thumped to the tune of 2.5% and 3.2%. However, following the late rally on Wall Street BHP's ADR is calling the local stock to open only 0.1% softer at $41.99.

Precious metal stocks could come under pressure, however after gold futures fell sharply, down 1.7% to US$1521.10/oz on the back of the higher US dollar.

In summary, it looks like a relatively flat open for the local market following a hugely volatile overnight session. It's hard to tell how we will trade after the open; there could be some upside risk following the overnight news or it could be a classic case of Friday afternoon profit taking as traders look to take any profits they can get in this volatile market.

In currency markets, the EUR/USD staged a huge intraday swing to the upside; it slumped to lows of 1.4126 in the European session before reversing sharply and closing at 1.4254. It's currently at 1.4272.

The AUD/USD largely tracked the euro, hitting early lows of 1.0453 before reversing course and closing the session at 1.0522.

Making news today

According to the Sydney Morning Herald, the Reserve Bank of Australia (RBA) assistant governor (economic) Philip Lowe was scheduled to speak at a business lunch in Adelaide.

The Australian Office of Financial Management was due to issue $750 million worth of April 2015 bonds.

In companies news, Westpac Group group executive - Technology, Bob McKinnon, was scheduled to speak at a business lunch in Sydney.

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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