It should be a buoyant start to ASX trading today after Wall Street closed with a 1,000 plus point gain for the Dow and solid gains for other measures.
Overnight trading in ASX futures saw a rise of around 103 points which should mean an early surge, although more bad news about the spread of the coronavirus in Australia, especially NSW, might limit gains.
The Aussie dollar regained the 66 US cent level to trade just above that mark in early Asian dealings.
Canada’s central bank chopped its key rate half a percent to 1.25% on Wednesday, following the Fed’s cut the day before, and the cuts by the RBA and Malaysia’s central earlier in the week.
US investors finally warmed to the emergency 0.50% rate cut from the Fed and the strong showing in Tuesday’s Democratic Super Tuesday primaries by Joe Biden (the former Vice President) has blunted fears of anti-business Senator, Bernie Sanders winning the nomination to take on Donald Trump in November’s poll.
As a result. Wall Street soared on Wednesday, as the Federal Reserve’s surprise interest rate cut gained support from other central banks, and the increased chances of former Vice President Joe Biden becoming the Democratic Party’s presidential candidate in November’s election.
Shares had sold off in the wake of Tuesday’s emergency rate cut by the Federal Reserve as it failed to inspire investor confidence in policymakers’ ability to counter the COVID-19 epidemic, and markets worried about a strong showing by Bernie Sanders.
But Biden’s strong showing has blunted those fears and Wall Street soared, helped by news of the Canadian rate cut emerged.
The Dow surged 1,173,07 points or more than 4.5%, the S&P 500 rose strongly as well, ending up 126 points or 4.22%. And the tech-heavy Nasdaq index had a similar day – adding 334 points or 3.85%.
On Tuesday the Dow finished 785.91 points lower, or 2.9%, after being down by as many as 997.04 points.
Treasury bonds prices soared, pushing down yields, with the rate on the 10-year note under 1% for most of the session, but closing at 1.038% as increased confidence spilled over.
Oil futures fell on Wednesday as OPEC and other producers struggled to reach an agreement on production cuts in Vienna aimed at supporting prices on the heels of a demand slowdown sparked by the COVID-19 epidemic.
The US Energy Information Administration, meanwhile, reported a sixth straight weekly rise in crude supplies, adding further pressure on prices.
April West Texas Intermediate crude fell 40 cents, or nearly 0.9%, to settle at US$46.78 a barrel in New York after trading as high as $US48.41. The global marker, May Brent crude lost 73 cents, or 1.4%, at $US51.13 a barrel in Europe.
Gold futures also ended lower on Wednesday, thanks to the rebound in global shares.
Comex gold for April delivery eased $US1.40, or 0.09%, to settle at $US1,643 an ounce after an intraday high of $US1,654.30. Prices had surged 3.1% on Tuesday in the largest one-day percentage rise since June of last year.
Comex May silver lost 5.8 cents, or 0.3% to settle at $US17.246 an ounce. Comex May copper added 0.5% to $US2.586 a pound.
