Markets in the US and Europe roared back Monday from Friday’s sell-off, setting up the ASX for a strong rebound from Monday’s over-selling.
The ASX futures platform was showing a 90-point rise at 7am after Monday’s 1.8% slump.
The wild swings of Friday and Monday will be seen again as the Fed’s higher inflation and rate rise forecasts have injected a big dollop of volatility into the markets for traders at investment banks in particular to feast on.
Monday’s rise in the futures market won’t make up for all the 133-point slide in the ASX 200 on Monday but will go long way to helping.
Gold rose, as did oil and copper but iron ore slumped 5%. The Aussie dollar traded around 77.35 US cents, down 0.40.
The Dow jumped 586.89 points, or nearly 1.8%, to 33,876.97 for its best day since March 5. The rise made up for all of last week’s loss.
The S&P 500 also rose strongly, up 1.4% to 4,224.79, and within 1% from its record high.
The Nasdaq saw a smaller gain with a 0.8% rise to 14,141.48 as some big tech names including Amazon, Tesla, Nvidia and Netflix registered losses.
The yield on the key 10-year US Treasury bond rose to just under 1.50% from around 1.44% on Friday – still a long way from the 2021 high of 1.77% at the end of March.
Shares of banks, energy firms and other companies recovered after falling sharply after the Fed’s meeting on Wednesday, when the central bank caught investors off guard by anticipating two quarter-percentage-point rate increases in 2023.
In Europe, the pan-European STOXX 600 index rose 0.70% and MSCI’s All Country World Index was up 0.72%, recovering some of Friday’s losses after touching its lowest since May 24 earlier in the session.
Asia shares will follow Australia in reversing Monday’s big losses. Japan’s Nikkei fell more than 3% drop.
Copper steadied on Monday, up from its lowest level since mid-April. Benchmark three-month copper on the London Metal Exchange (LME) was up at $US9,180 a tonne after falling to $US9,011 a tonne earlier in the day.
Nickel rose up by 1.7% to $US17,450 a tonne at 5pm. Aluminium rose 0.8% to $US2,403.50 a tonne. Comex gold futures rose to $US1,782.90 an ounce and then edged higher in after-hours trading.
Crude oil rose. Brent crude futures were at $US74.77, up 1.7% on the day, as US crude rose 2.5% to $US73.66 a barrel.
For iron ore, the price of 62% Fe fines delivered to northern China fell $US10.75 or nearly 5% to $US208.15 a tonne, 58% Fe fines lost $US10.77 to $US177.53 and the price of 62% fe fines from Brazil dipped 4% of $US10.44 to $US239 a tonne.
