Originally published by Rivkin Securities
US shares had a substantial rally on Wednesday with the Dow Jones Industrial Average climbing 1.4% and the S&P 500 up 0.9%. Some of the rally was due to an easing in the stance by President Trump on trade tariffs that he wants to impose on Canada, Mexico and the EU for steel and aluminium. The Nasdaq 100 also rallied and Tesla (NASDAQ:TSLA) shares climbed almost 10% as CEO Elon Musk told investors at the annual general meeting that Model 3 production would reach the goal of 5,000 cars per week by the end of the month.
Yesterday Australia’s GDP data showed stronger growth in the first quarter than anticipated. An increase in exports, particularly of mining commodities, drove most of the gain and contributed to a strong rise in company profits. GDP growth is now running at 3.1% year over year which is just above the RBA’s forecast of 3.0% growth for the next couple of years. Despite the strong number, household spending growth was still weak and the savings rate dropped to a 10-year low. Today Australia’s trade balance for April will be released.
The Australian dollar has continued to rally as the strong economic data of the last couple of days has provided it a boost. The AUD/USD is currently at $0.767, a one month high. The ASX should follow the US higher and ASX 200 futures are up 30 points this morning.
Data Releases:
- Australia Trade Balance 11:30am AEST