Shares set to follow offshore markets higher

The Australian market looks set to open higher following Wall Street’s positive performance amid speculation of more stimulus from the Federal Reserve after another batch of poor data releases.
Nanjing Night Net

On the ASX24, the June share price index futures contract was up 24 points at 4,068. The Australian dollar has climbed back above parity with the greenback after hovering close to the mark since the start of the week. A short time ago, the Aussie was trading at $US1.0028, up from 99.47 US cents late yesterday.

What you need to knowThe SPI was 24 points higher at 4068The $A was trading at $US1.0028In the US, the S&P500 added 1.08% to1329.1In Europe, the FTSE100 lost 0.31% to 5467.05Gold added 20 US cents to $US16.19.60 an ounceWTI crude oil added $US1.29 to $US83.91 a barrelRJ/CRB commodities index rose 1.02% to 272.05

Overnight, US markets closed higher amid speculation of more stimulus from the Federal Reserve after another batch of poor data releases. Rumours of central bank coordination to head off contagion in the markets took stocks through a roller coaster late in the day, as Greece’s weekend election and next week’s crucial G20 summit kept investors on edge.

In Europe, however, the looming Greek elections continued to weigh on sentiment. Spain’s borrowing costs have leapt to a euro-era record after Moody’s downgraded its debt close to junk-bond status and warned of a rising risk of a full-blown bailout.

Making news today

There is no major economic news is expected today.

In company newsCoalworks is due to hold a general meeting for shareholders to vote on resolutions to oust the company’s chairman and chief executive.Mindax Ltd general meetingPhillips River Mining general meetingPhoton Group Ltd extraordinary general meetingWaratah Resources Ltd general meeting

Analyst rating changesBendigo & Adelaide Bank raised to ‘equalweight’ at Morgan Stanley

The dollar

The Australian dollar has climbed back above parity with the greenback after hovering close to the mark since the start of the week – just as many families prepare for overseas holidays during the winter school break.

A short time ago, the Aussie was trading at 100.28 US cents, up from 99.47 US cents late yesterday, easing back from 100.34 US cents . The local unit fell to 99.26 US cents at about 7pm AEST yesterday before reversing its fortunes early today to finally breaking through the mark shortly after 5am AEST.

HiFX senior trader Stuart Ive said the Australian dollar had been pushed up by moves in the US following the release of weak data.

‘‘We’re a lot higher. The reason for that is that we saw the Dow Jones strengthen overnight, mainly led by weaker US data, especially employment numbers,” he said.

‘‘This has led to heightened expectations that the Fed (Federal Reserve Committee) will go down the road of QE3 (quantitative easing) next week.’’

Offhsore overnight

Bonds

Spain’s borrowing costs have leapt to a euro-era record after Moody’s downgraded its debt close to junk-bond status and warned of a rising risk of a full-blown bailout.Spain’s 10-year yield climbed 16 basis points, or 0.16 percentage point, to 6.92% after rising to 6.998%, the highest since the euro was introduced in 1999.Italy’s 10-year yield fell nine basis points to 6.13%, after advancing to 6.34%, the highest level since Jan. 20.German 10-year yields were little changed at 1.49%.

US treasuries fell as the US sold $US13 billion of 30-year bonds at a record low yield and traders speculated whether global central banks will coordinate assistance if Greek elections increase financial-market turmoil.US benchmark 10-year note yield rose five basis points to 1.64%.

How we fared yesterday

Local markets closed lower as nervous investors look ahead to Sunday’s Greek elections.

The benchmark S&P/ASX200 index was down 21.6 points, or 0.53 per cent, at 4,042.2 points, while the broader All Ordinaries index fell 21.7 points, or 0.53 per cent, to 4,089.8 points.

BusinessDay with agencies

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