Morning traders. Thanks @ttward and lounge lizards.
Overnight round-up and day ahead:
The ASX looks primed for a positive open after the global stock recovery extended into a third night.
The SPI 200 index futures contract edged up 12 points or 0.2 per cent to 6440 following strong gains on overseas markets. The ASX 200 yesterday surged 62 points or nearly 1 per cent.
Overnight, US stocks rose for a third session after China announced stimulus plans, and improving treasury yields dampened recession fears. The S&P 500 put on 35 points or 1.21 per cent. The Dow gained 250 points or 0.96 per cent as the repair work continued following a horror plunge on Wednesday that stripped 800 points or 3.1 per cent from the blue chip average. The Nasdaq was the pick of the major indices with a rise of 107 points or 1.35 per cent.
Fears of a global recession continued to recede after China announced reforms to its interest rate-setting mechanism to lower borrowing costs for businesses. The move followed reports that the German government is preparing stimulus plans to cushion its economy if it deteriorates further. Sentiment was also boosted by a US decision to grant Chinese giant Huawei a 90-day reprieve on restrictions on doing business with US firms, and by news that US officials are preparing for another round of trade negotiations with China.
The yield on the benchmark US government 10-year bond improved from 1.54 per cent to 1.6 per cent. The 10-year yield last week fell below the two-year yield for the first time since 2007, triggering recession fears.
The global recovery gathered momentum yesterday in Asia and extended into European trade. China's Shanghai Composite jumped 2.1 per cent, Hong Kong 's Hang Seng 2.17 per cent and the pan-European Stoxx 600 1.14 per cent.
Australia's largest miners shrugged off another wobble in iron ore. Overnight, BHP's US-listed stock rose 0.66 per cent and its UK stock 1.49 per cent. Rio Tinto added 0.63 per cent in the US and 1.5 per cent in the UK. The spot price for iron ore landed at China's Tianjin port yesterday eased 85 cents or 0.9 per cent to $US88.70 a dry tonne.
Crude oil was boosted by news of a drone attack on a Saudi oilfield. Brent crude settled $1.10 or 1.9 per cent ahead at $US59.74 a barrel after Houthi rebels from Yemen launched an assault on a natural-gas processing plant at the Shaybah oilfield owned by Aramco.
Tin plumbed three-year lows on news of a 33 per cent surge in stockpiles in London Metal Exchange warehouses. The metal dived 3.1 per cent in Shanghai trade. London-traded tin dropped 0.6 per cent. London copper gained 0.5 per cent on Chinese stimulus news, aluminium 0.1 per cent and lead 0.7 per cent. Nickel shed 1.7 percent and zinc closed near flat.
Gold declined as traders rotated into riskier assets. Gold for December delivery settled $12 or 0.8 per cent lower at $US1,511.60 an ounce
On currency markets, the dollar eased almost a third of a cent to 67.62 US cents.
Looking to the day ahead, futures traders appear to think the local market yesterday pre-empted most of the overseas gains. The tone of the session may change depending on what the minutes from the last Reserve Bank policy meeting reveal when they are released at 11.30am Eastern Standard Time. Mining heavyweight BHP is due to release full-year earnings at 8.30 am. Other companies due to report today according to Bloomberg include NIB, Oil Search, Monadelphous and Nanosonics.
Breakfast
We're going old-school today with a full Scottish breakfast, ie, a heart attack on a plate. Eat at your own peril. Please keep a defibrillator on standby.
