The Aussie dollar jumped back over 71 US cents (peaking at 71.29 in trading) overnight as US stock markets and oil prices shrugged off gloom from Europe and much of Asia yesterday.
The currency jumped across the various trading sessions from a low of around 70.10 US cents. It was trading around 70.85 at 8am in early Asian trading.
Investors are watching the Bank of Japan with hopes the central bank will further expand its huge bout of quantitative easing at its meeting later today.
Wall Street finished around 0.5% to 0.8% higher and US oil prices jumped more than 4% to well above $US33 a barrel, while Brent crude was up more than 3% to just under $US34 a barrel. Gold eased $1 an ounce to $US1,115 an ounce.
Our market will start around 10 points higher, but trading on the overnight futures market was hesitant and unconvincing, and losses during the day wouldn’t surprise, especially if the Chinese market again slides.
Driving oil higher is continuing unsourced reports and hints of production cuts by OPEC and other producers. Nothing firm has so far emerged, but the price keeps rising as bears cover short positions (and despite another rise in US oil stocks last week).
But iron ore slipped 1.2% to just under $US42 a tonne overnight in a small negative for local investors.
But as well as Japan investors will keep a close eye on the weak Chinese market after another bad day yesterday.
Chinese markets fell sharply on Thursday, with the main benchmark closing at its lowest level since November, 2014. The Shanghai Composite Index tumbled 2.9% to 2,655.66, with thanks to a now familiar move – late losses which snowballed towards the close of trading.
The smaller Shenzhen Composite Index fell 4.2%, while China’s Nasdaq-style ChiNext fell 4.6%. Elsewhere in Asia, markets were mixed with the Hang Seng Index up 0.8%. Japan’s Nikkei Stock Average down 0.7%, Australia’s ASX 200 finished up 0.6% and South Korea’s Kospi up 0.5%.
In Europe, shares ended lower as the market was weighed down by downbeat data from the eurozone, following the caution from the US Federal Reserve.
The Stoxx Europe 600 dropped 1.6% to close at 334.89, with Germany’s DAX 30 slumping 2.4% to 9,639.59, London’s Footsie down 1% and France’s CAC 40 off 1.3%.
Late News: watch for a weak quarterly report from Amazon to knock trading hard in Asia and into Europe and the US tonight. The e-tailer’s shares plunged 14% in after hours trading after it produced what analysts said was a weak report. In fact some analysts said the result was far short of their forecasts and was a big negative.
Amazon reported $US482 million in net income, up 125.2% vs the period last year, on revenues of $US35.75 billion, up 21.9%. US analysts had expected revenues to hit $35.93 billion. Earnings at $US1.00 a share fell well short of the $US1.56 in the consensus forecast. The shares had risen by 8.9% during normal trading overnight. They were down 14% just before 8.20 am Sydney time.
The sales forecast for the March quarter of between $US26.5 billion and $US29 billion, which was a bit short of market hopes.
