The ASX 200 is likely to fall slightly in early morning trading, with ASX Futures down 4 points or 0.1%.
It comes as somewhat of a surprise, as US markets have continued their upward momentum overnight on the back of falling inflation and growing confidence the rate-hiking cycle is at its end.
Interestingly, despite falling inflation and stronger markets, US government bond yields also gained on Wednesday night.
Yields on the US 10-year Treasury increased by 10 basis points to 4.54%, and the yield on the US 2-year Treasury also rose by 10 basis points, reaching 4.91%.
Prices paid to US producers also saw an unexpected drop, the most significant decline since April 2020, when the pandemic fully began to take effect.
US retail sales also slowed in October, although it’s likely the holiday season will give that sector a much-needed boost.
As for stocks, Target (NYSE:TGT) gained 17.8% on better-than-expected third-quarter results and apparel company VF Corporation (NYSE:VFC) enjoyed an analyst upgrade from JPMorgan (NYSE:JPM) that boosted its share price by 14.1%.
Entertainment giant Walt Disney (NYSE:DIS) shares also rose 3.1% on news ValueAct Capital may acquire a stake in the company, while TJX Companies (NYSE:TJX), a department story corporation, shed 3.3% after its profits fell short of Wall Street forecasts.
Overall, the Dow gained 163.5 points or 0.5%, the S&P500 0.2% and the Nasdaq 0.1% or 9.5 points.
European markets
European markets also enjoyed a boost overnight, with slowing inflation in major economies being a significant contributor.
Germany reported its most substantial drop in wholesale prices in over three years, with a 4.2% decrease in October. The United Kingdom’s annual consumer price inflation also saw a decline to 4.6% in October from 6.7% in September, lower than the anticipated 4.7%.
Technology shares were boosted 2.2%, with chipmaker Infineon soaring by 9.7% due to its higher-than-expected revenue forecast for 2023.
The pan-European FTSEurofirst 300 index rose by 0.4%, and the UK FTSE 100 index gained 0.6%.
Currencies and commodities
The US dollar showed strength against other major currencies overnight.
The Euro fell from US$1.0879 to US$1.0831 and settled near US$1.0845 at the close of US markets.
The Australian dollar also weakened, sliding from US65.34 cents to US64.83 cents, and was about US65.05 cents at the US market close.
The Japanese yen moved from 150.25 yen per US dollar to JPY151.42 and was close to JPY151.35 at the end of the US trading session.
As for commodities, oil continued to fall, following an unexpected increase in US crude inventories.
According to the US Energy Information Administration (EIA), US crude stocks surged by 3.6 million barrels last week to 421.9 million barrels, surpassing analysts' predictions of a 1.8-million-barrel rise.
Consequently, the Brent crude price dropped by US$1.29, or 1.6%, to US$81.18 a barrel, while the US Nymex crude price decreased by US$1.60, or 2%, to $76.66 a barrel.
Base metal prices showed mixed results. Copper futures rose by 1% following encouraging industrial production data from China.
However, aluminium futures fell by 0.2%.
The gold futures price experienced a slight decrease of US$2.20, or 0.1%, to US$1,964.30 an ounce, with spot gold trading near US$1,959 an ounce at the US close.
Iron ore futures recorded a gain after recent strong performances, increasing by US47 cents or 0.4% to US$129.25 a tonne.
Looking ahead, Australia is set to release employment data.
Companies including Australian Agricultural Co and Infratil are scheduled to announce their earnings.
Annual general meetings (AGMs) will be hosted by several firms, such as a2 Milk, Altium, Cettire, Charter Hall, HUB24, Humm, IGO, Mineral Resources, Mirvac, News Corp (NASDAQ:NWSA) (NASDAQ:NWS), Northern Star Resources (ASX:NST), REA Group, Seven Group, Sonic Healthcare and Superloop. Additionally, ANZ and Orica shares will trade ex-dividend.
In the US, the upcoming economic data includes import/export prices, jobless claims, and industrial production.
The Philadelphia and Kansas City Federal Reserve will release surveys, along with the NAHB housing market index. Companies like Alibaba (NYSE:BABA), Gap, Macy's (NYSE:M), and Walmart (NYSE:WMT) are also set to issue their earnings reports.
On the small cap front
The ASX Small Ords gained 49.1 points or 1.83% yesterday, outstripping the AX200’s 1.37% gain.
You can read more about the following and other stories on our website throughout the day.