Standby for the first rise in the local market for a week.
A surge on Wall Street, a fall in the value of the US dollar and jump in commodity prices, including a 2% rise in iron ore prices to more than $US65 a tonne, combined to push up the share price futures contract by more than 60 points, meaning the best start for the ASX for well over a week.
On Wall Street, the S&P 500 jumped 25.05 points, or 1.2%, to 2,105.20, while the Dow surged 236.36 points, or 1.3%, to 18,000.40 (turning positive for the year) and the Nasdaq Composite added 62.82 points, or 1.3% to close at 5,076.69.
Tech stocks, energy and financials led the way higher as oil prices rose on news of a fall in US oil stocks (but despite a small rise in output last week). As well commodity prices were boosted by the weaker US dollar.
The rebound ended a four day decline on Wall Street. Markets across Europe also rose strongly, despite yields on german 10 year bunds hitting 1%, the highest they have been for nine months.
Standing out for a seventh day (interesting how iron ore prices have been rising while the ASX has been falling) was the rally in iron ore with the price rising above $US65 a tonne for the first time in four months.
Spot iron ore prices rose 1.9% to $US65.10 a tonne, up from its prior close of $US63.90 a tonne. That’s the highest they have been since the start of February.
They are now almost 40% above the 10-year low of $US46.70 a tonne it slumped to in early April.
Driving the gains have been falling stockpiles at Chinese ports and hopes of fresh stimulus spending.
The Chinese government overnight allocated another 1 trillion yuan ($A230 billion) quota to local governments to exchange high-interest debt for low-cost, long-maturity bonds to reduce balance sheet pressure on provinces.
Its in addition to the directive last month to Chinese banks to continue providing financial support to mroe than $A3 trillion of local government projects and infrastructure investments.
