Originally published by Rivkin Securities
US stocks opened higher overnight and then continued to rally throughout the session. The Dow Jones eventually closed 1.3% higher with industrials and financials the strongest performers. This is the third positive day in a row for the index and brings it back to slightly positive. Twitter (NYSE:TWTR) shares plunged 14% in morning trading as investors became concerned that increased action against fake accounts will slow user growth. Later in the session a rally brought the stock back to being down just 5.4%.
Australian short-term interest rates have started to ease over the past week with the 3-month Bank Bill Swap rate now off its recent highs, currently at 2.06%. This rate has surged in recent months despite no official interest rate changes which created a risk that banks would be forced to raise interest rates independently of any cash rate increase. The recent softening will take some of that pressure off for the time being.
Gold prices went for a wild ride overnight, first climbing by around US$10 but once the US market opened, the trend reversed and gave back all of the gains. The expectation of further interest rate hikes may be the reason for pressure on gold prices.
The ASX 200 managed a slightly positive close yesterday (up 0.2%) and futures this morning are up 27 points.
Data Releases:
- UK GDP 6:30pm AEST