To the scoreboard.
Dow: 25,690.72 +380.73 (+1.50%)
S&P 500: 2,776.38 +29.08 (+1.06%)
AUD/USD: 0.7851 +0.0013 (+0.17%)
ASX200 SPI futures (March contracts): 6,052 (+37)
1. Stocks are up and about: The ASX200 rally looks set to continue, following another strong session for US stocks overnight. The S&P500 built off Friday night’s gains as global risk appetite returns following the stock selloff earlier this month — which Goldman Sachs says was more due to technical factors, rather than a fundamental market shift.
2. It was a quieter session in bond markets, ahead of Jerome Powell’s testimony before US Congress tonight (12:30am AEDT) — his first major appearance as Fed chair. Powell’s comments will be closely scrutinised for clues as to the Fed’s 2018 rates outlook, but for now it appears markets are positioning for him to play a straight bat, with US 10-year bond yields slightly lower this morning at 2.86%.
3. Currency markets also appear to be taking a wait-and-see approach before Powell’s testimony. The price action was choppy with the AUD pushing higher against the greenback this morning, but off its overnight high of 0.7893 US cents. The euro is holding above $US1.23, but is also down from its high after a measured speech by ECB president Mario Draghi.
4. Bitcoin catches a bid: Prices are back over $US10,000 this morning as Goldman-backed tech company Circle announced the $US400 million purchase of the Poloniex cryptocurrency exchange. And Bank of America is wary of crypto — the US’ third-largest bank mentioned cryptocurrency multiple times in the risks section of its quarterly regulatory filing with the SEC.
5. The day ahead: The ANZ’s weekly consumer confidence index and HIA new homes sales data are out in Australia this morning (neither will be market movers). In Europe there’s preliminary inflation figures for Germany but it’s all about the US tonight — in addition to Powell’s testimony, there’s important data on durable goods orders and balance of trade numbers for January.
6. Commodities wrap: In line with the markets’ status quo across recent sessions — with stocks up, the US dollar slightly weaker and bond yields retreating from their high — commodity prices continued to find support overnight. Iron ore is now at its highest level since August last year, while oil prices extended last week’s solid gains and gold edger higher to $US1,333 an ounce.
Have a great day.