The Australian stockmarket looks like surging when trading resumes this morning after Wall Street rebounded sharply taking ASX 200 futures higher with it and setting up a further recovery from Friday’s positive end.
That was after the ASX-200 ended 7.2 points higher on Friday after fluctuating during trading.
But after Wall Street staged its big rebound – with the Dow and S&P 500 adding more than 2% on the day – ASX futures trading saw a 2.4% or 166-point gain, setting up a surge at the 10 am start today.
Oil eased, gold slumped and wheat and corn prices came off multi-year highs.
Eurozone shares rose 3.5% on Friday and US shares rose 2.2% (The S&P 500) which looks like a relief rally from oversold conditions helped by expectations that a further worsening of the energy crisis can be averted.
Despite Friday’s jump, markets till lost ground over the week. Eurozone shares fell 2.6% over the week, Japanese shares were down 2.4%, Chinese shares lost 1.7% and Australian shares slumped 3.1%
Oil prices pushed higher as the conflict escalated with West Texas Intermediate rising briefly above $US100 a barrel before pulling back as western sanctions avoided the Russian energy sector. Brent had touched a high of $US105 a barrel before falling back under the $US100 level.
Long term bond yields rose in the US and Germany but fell in Japan and Australia being buffeted by the fear of higher inflation at the same time as safe haven buying as Putin sent the tanks into Ukraine.
Iron ore prices rose, and this helped push the $A up despite safe haven buying pushing up the $US. The Aussie dollar ended over 72 US cents and up 0.7% for the week.
The Dow Friday saw its biggest daily percentage gain since November 2020 with the market rebounding for a second day as Russia continued to invade Ukraine.
The Dow surged 834.92 points, or 2.51%, to 34,058.75, the S&P 500 jumped 95.95 points, or 2.24%, to 4,384.65 and the Nasdaq was up 221.04 points, or 1.64%, to 13,694.62.
For the week, the Dow was down 0.1%, the S&P 500 was up 0.8% and the Nasdaq was up a solid 1.1%.
Bond yields, initially lower in a flight-to-safety trade, reversed course and the 10-year yield was back near 2% on Friday at 1.97%.
Oil initially jumped last week, with Brent crude surging above $US100 a barrel before settling back down to about $US98 on Friday.
US core inflation (so-called PCE, or personal consumption expenditure-based costs) rose an annual 5.2% in January, the highest rate for more than four decades. That was up from 4.9% in December and for 2021.
It was a reading that adds to the case for several rate rises from the Fed over the rest of this year.
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April Brent crude futures contract fell $1.15, or 1.2%, to settle at $US97.93 a barrel on Friday, after climbing as high as $US101.99.
The more active May contract lost $1.30, or 1.4%, to $US94.12.
US West Texas Intermediate (WTI) crude fell $1.22, or 1.3%, to settle at $US91.59 a barrel, after hitting a session high of $US95.64.
For the week, Brent rose about 4.7%, while WTI rose 1.53%.
The OPEC+ oil producers, including Russia, is due to meet this week on Wednesday to decide on the next 400,000 barrels a day reduction in the production cap in April.
Friday saw the latest weekly rig use report from Baker Hughes and it showed the number of oil-directed drilling rigs rose by 2 to 522 last week. That was a rise of four the week before and 19 the week before that.
In Chicago, wheat prices Friday eased from 13 year highs on Thursday as profit-taking pushed prices down from their highest level since mid-2008.
Corn eased from Thursday’s eight-month peak, while soybeans slipped from a 9-1/2-year top in the previous session as traders liquidated long positions ahead of the weekend.
Russia and Ukraine account for 29% of global wheat exports, 19% of corn exports and 80% of sunflower oil exports.
Chicago Board of Trade May soft red winter wheat dropped to $US8.5975 a bushel, down the new 75-cent daily trading limit, after earlier touching a 13-1/2-year high for a most-active contract.
The contract was still up 6.9% for the week.
May corn shed 34.5 cents to $US6.5575 a bushel but was up 0.5% for the week.
Comex gold fell sharply losing more than $US36 an ounce to settle at $US1,887.60 an ounce.
Copper fell 1.05% for the week to end at $US4.472 a pound and silver lost 0.02% to end at $US23.997
