To the scoreboard:
- Dow: 25,558.73 +396.32 (+1.58%)
- S&P500: 2,840.69 +22.32 (+0.79%)
- AUD/USD: 0.7262 +0.0022 +0.30%
- ASX SPI futures (September contracts): 6,280 (-2)
1. Positive developments yesterday concerning possible US-China trade discussions gave rise to more bullish sentiment on global markets overnight. US stocks recouped the previous day’s falls as Walmart surged, while European markets also rallied.
2. The Chinese yuan strengthened against the greenback, and further steadiness in the Turkish lira also helped risk appetite. After receiving a $US15 billion capital injection from Qatar, Turkey’s finance minister outlined a series of government spending cuts overnight.
3. Italian stocks fell by more than 1.8% as toll road operator Atlantia crashed by 22% following Tuesday’s bridge collapse. The yield spread on Italian and German 10-year bonds also continued to widen, while the US 2-10 spread is still hovering at decade-lows.
4. Despite a strong global lead, ASX futures are slightly lower this morning and looking longer term, Australian equity strategist Richard Coppleson thinks the market “looks like a sell”. Read more on Coppleson’s outlook here.
5. The US dollar fell back from its 13-month high overnight, as the major pairs gained ground in addition to EM currencies. The AUD was one of the best performers, and reached a high of 0.7286 US cents but has fallen back in early Asian trade.
6. Base metals recovered after getting hammered in the previous session, as copper rose by more than 2% with stronger gains for zinc and nickel. Gold is little-changed at just above $US1,170 an ounce, while oil bounced off its recent low as brent crude rose 1% to $US71.32.
FRIDAY BONUS: There were profits (and losses) to be made from the Turkish lira’s collapse this week, as one Barclays trader lost $US19 million. Here’s a summary of the winners and losers on global trading desks.
And a look at today’s economic calendar.
- RBA Governor Lowe – testimony to House of Representative Economics Committee.
- Canadian inflation data.
- University of Michigan consumer sentiment survey in the US.
Have a great weekend.
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