6 things Australian traders will be talking about this morning

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Good morning.

To the scoreboard:

Dow: 23,834.08 +253.30 (+1.07%)
S&P 500: 2,627.08 +25.66 (+0.99%)
AUD/USD: 0.7597 -0.0005 (-0.07%)
ASX200 SPI futures (December contracts): 6,028 (+39)

1. Pound jumps on Brexit deal: After sliding earlier in the session, the pound sharply reversed course on news that the UK had reached a deal with the European Union as part of Brexit negotiations. The UK has agreed to honour its financial commitments to the EU, with the net figure payable estimated at 45-55 billion euros. Here’s the overnight move for GBP/EUR:

Source: Investing.com

2. Good session for stocks: UK and European stocks opened higher after Asian markets rallied into the close, and the S&P500 is up strongly as the Republican tax bill cleared another hurdle in the Senate. The ASX200 looks set to open higher on the strong global lead, although mining and energy sectors may face headwinds after commodities were sold off overnight.

3. China outlook weighs on commodities: Nickel futures fell by 4% and there were also sharp falls in copper on concern around Chinese demand, while spot prices for benchmark iron ore crept higher last night with continued support from elevated steel prices. Oil edged lower ahead of Thursday’s OPEC meeting, with some lingering doubts around Russian cooperation with plans to extend supply cuts beyond March 2018.

4. Aussie battler holds ground: The AUD traded in a narrow range around US76 cents despite the selloff in commodities, while the yield spread between Australian and US 2-year debt edged wider and remains in negative territory. It was a relatively quiet night for bonds, with the spread between US 2-year and 10-year bond yields holding at just under 60 basis points.

5. Bitcoin cracks $US10,000: Bitcoin briefly cleared the the $US10,000 mark in overnight trade, capping an increase of $US2,000 since last Thursday. Prices then retreated and a short time ago to trade at around $US9,900 on the Bitfinex exchange. Here’s a summary of what leaders from the worlds of finance and tech think about the cryptocurrency, via Bloomberg.

6. OECD advocates rate hikes: The RBA should raise interest rates in the second half of 2018, according to the Organisation for Economic Co-operation and Development. The inter-governmental agency highlighted financial stability risks in housing as a key reason for raising rates. The AFR has more here.

Have a great day.