Are we at the end of the current rate-rising cycle? There are signs that the markets think we are.
All eyes are on the August US inflation data due today, with hopes it will show signs that the overheated economy is moderating.
Surveys of analysts indicated consumer inflation expectations for the year ahead fell from 6.2% to 5.7% in August.
Bloomberg economists are tipping that CPI will have risen 8% in August from a year earlier versus 8.5% in July.
The data will provide clues to the Fed’s next rate move.
Optimism is also no doubt propelled by Ukraine’s progress in the northeast of the country, with Russian occupiers beating a retreat and residents returning to their homes.
ASX poised to start in the green
The Australian share market looks set to open higher today, following a positive day of trade on Wall Street which saw the Dow gain 0.7%, the S&P 500 add 1.1% and the Nasdaq rise 1.3%.
The S&P 500 Index is on a roll, posting its best four-day rally since early July.
And there were plenty of familiar names in the green, including BHP (ASX:BHP) (+2.3%), Rio Tinto (ASX:RIO) (+1.6%) and Atlassian (NASDAQ:TEAM) (+2.3%).
Apple (NASDAQ:AAPL) climbed 3.9% on the back of strong demand for its latest iPhone and Apple watch models.
Energy and information technology led the pack of 11 S&P 500 industry groups higher.
ASX futures were up 45 points or 0.65% to 7002 near 6.45am AEST. The Aussie dollar rose from around 68.35 US cents to highs near 69 US cents and was near 68.85 US cents at close.
Musk Twitter (NYSE:TWTR) deal still on table
Tesla (NASDAQ:TSLA) was also up 1.6%, and there was news about owner Elon Musk’s on-again-off-again Twitter bid. The billionaire is now keen to exit the deal he made to purchase the social media platform, but its shareholders aren’t planning to release him from the $44 billion takeover so easily.
Shareholders – other than Musk, of course, who has a 10% stake – are poised to vote to approve the original deal, which could mean a court date with a Delaware judge if Musk fails to close.
Back in April Musk agreed to pay US$54.20 per share for the company, which has been trading well below that amount since Musk subsequently announced the deal was on hold and later tried to back out of it.
All this on the eve of a whistle-blower’s appearance before Congress, during which he is likely to detail allegations of security and privacy vulnerabilities at the social media company.
The stock closed Monday at $41.41.
Oil supply will be tight
Global oil prices rose yesterday, with emergency stocks in the US falling 8.4 million barrels to 434.1 million barrels in the last week, a low not seen since October 1984, according to data from the Department of Energy.
European countries are understandably keen to find secure sources of energy for the coming winter, but are sceptical about the revival of the Iran nuclear deal.
Should the deal not be revived, they will have to count Iran out of the list of possible suppliers, which would keep global supply tight.
Accordingly, Brent crude rose by US$1.16 or 1.2% to US$94.00 a barrel, while US Nymex crude was up by 99 US cents or 1.1% to US$87.78 a barrel.
Base metals were higher yesterday, rising by between 0.8% and 6.9% with nickel up the most. Aluminium went its own way, 0.3%.