Aussie index expected down 20 points

Our current quote for the S&P/ASX 200 index is to open down 20 points at 6577.

The index is set for a potential third losing day in a row following broad skepticism from investors over the recently announced liquidity plan from the main central banks. Oils and financials are likely to be hardest hit. Doubts are growing as to the substance behind the headlines of the anti-credit crunch initiative. Interbank lending remains to be convinced, and 3 month LIBOR rates are remaining stubbornly high.

Inflationary data out from the US on Thursday has also reduced the likelihood of a further rate cut there in January.

Direction today will also be driven by the Japanese Tankan survey and the risk here is definitely to the downside; a reading of lower than 21 in the main index would show the importer of around a third of Australian exports is struggling in the wake of the credit crisis and high energy prices.

We currently expect the Nikkei 225 to open down around 50 points at 15485.