The Yellen boost continued to drive markets overnight – except for gold which gave half some of Tuesday’s gains, and oil, which rose and then drifted back.
Markets in Europe and the US rose, but perhaps the biggest impact was on currencies where the US dollar again weakened and the Aussie dollar topped the 77 US cents mark for the first time in nearly a year.
Investors in the local futures market ignored that move overnight, setting up the ASX for a 50 point plus gain at the start this morning for the ASX 200. Wall Street saw gains of between0.4% to 0.5% for the Dow, the S&P 500 and the Nasdaq.
Our futures market has pencilled in gains of double that, but will there be a repeat of yesterday where the market opened solidly, rose 1%, and then slowly lost those gains to barely end higher at the close?
A lonely negative will be weaker iron ore price – down again overnight, this time falling 1.7% to $US54.18. And despite the weaker US dollar,metal prices all fell for another day, especially copper, which closed around $US2.18 a pound and has lost 11 uS cents a pound in the past week.
Gold fell $US10 an ounce to $US1,227 in New York, again ignoring the usually positive impact of a weaker greenback.
The greenback weakened against nearly all of its developed and emerging-market rivals as investors accepted that the Fed would move more slowly on rates after the caution shown in a speech Tuesday by Federal Reserve Chairwoman Janet Yellen.
Investors interpreted her outlook as being ‘dovish. Besides the weaker dollar, US bond yields eased for another day, with the yield on US10 year securities ending around1.8%.
While the showed small losses against the yen and the euro,l larger falls were seen against Australian dollar which rose 0.6% to 76.81 cents, compared with 76.15 cents late Tuesday, and a session high of 77.09 US cents. That;s the highest the Aussie has been against the greenback since last June.
The New Zealand dollar was up 1.1% to 69.30 cents, compared with 68.54 cents Tuesday.
