To the scoreboard:
- Dow: 25,366.43 +617.70 (+2.50%)
- S&P 500: 2,744.88 +62.68 (+2.34%)
- AUD/USD: 0.7307 +0.0082 (+1.13%)
- ASX200 SPI futures (December contracts): 5,765 (+40)
1. US stocks posted their biggest daily gain since March overnight, after Fed chair Jerome Powell said US interest rates were “just below” levels that would be neutral for the economy. A full recap of Powell’s speech is here.
2. US bond yields edged lower, while the US dollar fell across the board following the speech. It marked a change in tone from comments Powell made at the start of October, when he said rates were still “a long way” from neutral.
3. Falls in the USD provided support for the UK pound, after a Bank of England report which highlighted recessionary risks in the event of a no-deal Brexit. And the Aussie dollar surged ahead to be back above US73 cents this morning.
4. Prior to Powell’s speech, global markets were already more buoyant after comments from Trump advisor Larry Kudlow provided some optimism around US-China trade negotiations ahead of the G20 summit this week.
5. Prices for brent crude oil fell back below $US60 a barrel, after US oil stockpiles rose for the 10th straight week and Saudi Arabia said it won’t cut output unless other OPEC producers agree to similar measures.
6. And Bitcoin had a big night, posting its biggest daily gain since April as prices soared back over $US4,000. BTC is still down by around 40% since the Bitcoin Cash hard fork on November 14.
The main events on today’s economic calendar:
- Australian Q3 capex data (11:30am AEDT). David Scutt’s 10-second guide is here.
- Japan retail trade.
- US PCE core inflation measure for October.
- Minutes from the October meeting of the US Fed.
- Fed committee member Charles Evans speaks on a panel in Boston.
Have a great day.