The Australian share market looks likely to gain today, with futures up 19 points or 0.3% to 7,313 this morning. The dollar is also riding higher, adding 0.7% to rest at 67.85 US cents overnight.
In the US, investors were betting on a stronger consumer outlook, despite signs pointing to another rate hike.
On Wall Street, the Dow was up 0.2% while the S&P 500 lifted 0.3% and the Nasdaq nearly made it to a whole per cent at 0.9%.
There were moderate lifts across the board, with Bitcoin up 0.7% to $US29,262, Tesla (NASDAQ:TSLA) adding 0.2%, Apple (NASDAQ:AAPL) up 0.6% and Amazon (NASDAQ:AMZN) gaining 0.3%.
Economic data showed consumer confidence up from 110.1 to 117 in July, manufacturing down from -8 to -9 in the same period and the house price index up 0.7% in May.
IMF warns of slowing growth
The International Monetary Fund (IMF) predicts a deceleration in global economic growth from 3.5% last year to 3% this year and the next due to factors such as high inflation, the conflict in Ukraine and China's slowing economy.
Although the IMF slightly upgraded its global growth projections in the latest World Economic Outlook, chief economist Pierre-Olivier Gourinchas remained cautious, warning that several challenges continue to cloud the economic horizon.
The global economy is gradually rebounding from the pandemic and showing signs of progress, but central banks' interest rate hikes are hampering economic growth and core inflation remains significantly above central bank targets.
Global inflation is expected to decline from 8.7% in 2022 to 6.8% in 2023 and further to 5.2% in 2024. Nevertheless, the threat of increased inflation arising from Russia's invasion of Ukraine and extreme weather events may prompt central banks to raise interest rates or lead world leaders to implement more restrictive economic policies.
Additionally, China's post-pandemic recovery is showing signs of losing momentum, and there remains a risk of a deeper contraction in the real estate sector. The IMF maintains its growth forecasts for China at 5.2% for this year and 4.5% for 2024.
Currencies, crude and commodities
Currencies were mixed against the greenback in overnight trade. The Euro declined from US$1.1085 to US$1.1020, hovering around US$1.1050 at the US market's close. The Aussie dollar advanced from 67.52 US cents to 67.93 US cents and settled near 67.90 US cents at close. The Japanese yen strengthened from 141.68 yen per US dollar to JPY140.85, remaining close to JPY140.95 at the US close.
In commodities trading, global oil prices surged by 1.1% to reach three-month highs on Tuesday. The positive sentiment was driven by indications of tighter supplies and China's stated commitment to bolstering its economy.
Brent crude climbed by 90 US cents or 1.1% to US$83.64 a barrel, while US Nymex crude rose by 89 US cents or 1.1% to US$79.63 a barrel.
Base metal prices also saw gains on Tuesday, with copper futures rising by 1.6% and aluminium futures increasing by 1.4%.
Gold futures inched up by US$1.50 or 0.1% to US$1,963.70 an ounce, while spot gold hovered near US$1,964 an ounce at the US market's close.
Iron ore futures recorded a modest gain of US21 cents or 0.2%, reaching US$112.72 a tonne on the promise of a Chinese recovery.
What’s happening in small caps?
The S&P/ASX Small Ordinaries closed at 2,868.09 yesterday, up 0.09% on the previous day.
Making news this morning, which you can read more about throughout the day with Proactive are: