The ASX is expected to continue its run in the green when markets open today, with investors buoyed by the Bank of Canada’s unexpectedly dovish approach to its most recent rate rising duties.
The bank had been widely expected to raise rates by 0.75%, but instead lifted them by just 0.5% to 3.75%, providing some hope that other central banks may soon take the foot off the accelerator too.
ASX futures were up around 26 points early this morning.
Big tech reports downbeat earnings
On Wall Street, the three major indices were mixed, with individual stocks pulling in different directions. The Dow was flat, gaining 0.1%, while the S&P 500 slipped 0.7% and the Nasdaq lost 228 points or 2% on the back of downbeat earnings results from big tech.
Microsoft (NASDAQ:MSFT) shares plummeted 7.7% after the company posted its weakest sales growth in five years.
Alphabet (NASDAQ:GOOGL), Google’s parent company, slumped 9.1% after some poor ad sales. Boeing (NYSE:BA) also fell 8.8% following a lowered horizon on deliveries of its 737 jets.
Conversely, Visa (NYSE:V) shares jumped 4.6%, allowing the Dow Jones to hold the line, as the company exceeded its quarterly outlook.
Aussie dollar jumps
The Australian dollar is trading at 64.94 US cents, a three-week high, after climbing 1.6% overnight – at one point it was buying 65.11 US cents.
Other global currencies were strong against the greenback, as the US reckoned with falling bond yields. The Euro rose from lows near US$0.9950 to highs near US$1.0088 and was near US$1.0080 at the US close. The Japanese yen firmed from 148.27 yen per US dollar to JPY146.22 and was near JPY146.35 at the US close.
In Europe, share markets rose to five-week highs as optimism grew about today’s meeting of the European Central Bank.
The continent-wide FTSEurofirst 300 index gained 0.5%, while the UK’s FTSE 100 index rose by 0.6% as Britain's new prime minister, Rishi Sunak, delayed releasing his fiscal repair plans until the middle of November.
Budget reactions continue
Economists continued to react to the Budget today, with some holding it in high regard as responsible fiscal policy designed for tough times.
"It may take a little time for Aussies to fully appreciate that the sugar hits of more recent budgets are a thing of the past, but this budget sets a clear line in the sand," economist Nicki Hutley told the ABC.
"We can't have Scandi-style social services based on a Cayman Islands tax system. Something's gotta give."
Treasurer Jim Chalmers said: “Inflation is the dragon we need to slay. There’s never any shortage of worthy and well-meaning offers or ideas on where we might spend more money. And that temptation becomes a lot stronger when you see people hurting.”
In other news
Global oil prices went in a now-predictable direction yesterday, rising 3% after the US exported 5.1 million barrels a day last week – a record amount.
Brent crude lifted US$2.17 or 2.3% to US$95.69 a barrel, while US Nymex rose US$2.59 or 3.0% to US$87.91 a barrel.
Base metal prices rose on a weaker US dollar. Aluminium was up as much as 5.4%, with copper up 3.3%.
Gold futures were up by US$11.20 an ounce or 0.7% to US$1,669.20 an ounce, and spot gold was trading near US$1,664 an ounce.
Iron ore futures fell by US$1.05 or 1.1% to US$93.56 a tonne.