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Twitter predicted to close out at $22.8 billion

Four key markets in focus today.

Twitter

IG has been making a grey market on Twitter for a few weeks now and our clients see the market cap closing out tonight at $22.8 billion, which would be a huge rise on the day. The stock launches tonight and the eyes on the market will be firmly on the name. There has been talk the company could list at $27, which on market estimates puts it on a slightly higher price to sales metric than Facebook, and well ahead of Google at 6.1x. It is an exceptional time to be listing, given US stock markets are on their all-time highs and Twitter’s peers are doing very nicely right now.

AUD/USD

Australian employment is in full focus today at 11:30 and the market expects 10,000 jobs to be created. It’s interesting to see the market has priced in twenty two basis points of hikes from the RBA over the next twelve months, so a good number here may be partially priced in. The unemployment rate is expected to tick up to 5.7% and it will be interesting to look at the participation rate, which at 64.9% is the lowest since 2006. Of course if we see the participation rate increase it could really put upside into the unemployment rate which would be an AUD negative. Sellers should come into the market around 0.9540 and a break here could see 0.9700 come into play.

Australia 200

The ASX 200 should open weaker today, given 19.8 points come out of the market on the open (we took the points out of fair value at 16:00 yesterday), as NAB and ANZ go ex-dividend. There is good strength in the index at present, with 51% of stocks trading above their 21-day moving averages. A month ago only 36% of ASX companies were above their 21-day moving averages. Traders will continue to eye the multi-year high at 5457.

Fortescue Metals (FMG)

FMG is eyeing the March 2012 high of $6.18, and given the further strength in iron ore overnight, a move to this pivot high is not out of the question in the short term. UBS upgraded the stock to a buy yesterday, while Credit Suisse also put the stock on its preferred list, looking for a move above $7.00. FMG is a touch overbought, trading two standard deviations from its 21-day moving average, however this highlights the strength in the stock and pullbacks should be supported.

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