The ASX looks likely to open higher this morning with ASX futures trading 0.3%, or 23 points, higher at 7,512 at 9am AEDT. This follows an 0.45% fall on Thursday trading in what has otherwise been a strong week.
The positive Friday outlook follows strength in US markets overnight, led by the tech-heavy Nasdaq, and supported by US third-quarter GDP growth coming in below forecasts.
The GDP figures led to hopes of rate cuts, which weighed on the US dollar and saw the Aussie dollar climb to a five-month high and briefly top 68 US cents overnight.
The AUD is now just 0.2% lower for the year, having rebounded from an 8 % decline in October when it slumped to just 62.68 US cents.
What happened overnight?
Here’s what we saw (source Commsec):
US markets
US sharemarkets advanced on Thursday after recovering from a broad sell-off in the prior session, with the latest batch of US economic data adding to expectations that borrowing costs could ease next year.
Gross domestic product (GDP) was revised lower in the third quarter and initial applications for unemployment insurance increased less-than-forecast but remained near historical lows.
The Dow Jones index rose by 322 points or 0.9%, rebounding from its worst session since October.
The S&P 500 index gained 1% and the Nasdaq index added 186 points or 1.3%.
European markets
European sharemarkets closed lower on Thursday after two sessions of gains.
- The continent-wide FTSEurofirst 300 index dipped 0.2%.
- In London, the UK FTSE 100 index slipped 0.3%.
The automobile and parts index and real estate stocks fell the most, each down 0.8%. Healthcare stocks bucked the trend to rise 0.2%.
The European Central Bank's (ECB) vice president, Luis de Guindos, said it was too early to talk about interest rate cuts.
Commodities
Global oil prices slid 0.4% on Thursday after Angola said it would exit the Organisation of the Petroleum Exporting Countries (OPEC), raising questions about the producer group's efforts to support prices by limiting global supplies.
- The Brent crude price fell by 31 US cents or 0.4% to US$79.39 a barrel.
- The US Nymex crude price dipped 33 US cents or 0.4% to $73.89 a barrel.
Base metal prices were mixed on Thursday.
- Copper futures rose by 0.2% but aluminium futures slid 0.2%.
The gold futures price rose by US$3.60 or 0.2% to US$2,051.30 an ounce. Spot gold was trading near US$2,044 an ounce at the US close.
Iron ore futures rose by US46 cents or 0.3% to US$135.31 a tonne, helped by tight inventories and expectations of higher Chinese demand despite an uncertain outlook.
Currencies
Currencies were stronger against the US dollar in European and US trade.
- The Euro rose from US$1.0934 to session highs near US$1.1000 at the US close.
- The Aussie dollar lifted from US67.38 cents to session highs near US68.00 cents at the US close.
- The Japanese yen firmed from 143.33 yen per US dollar to JPY142.05 and was near JPY142.20 at the US close.
On the small cap front
The S&P ASX Small Ordinaries lost 0.99% yesterday, while the ASX 200 fell 0.45%.
You can read more about the following throughout the day: