Exciting play in the Champions League matches this morning. Man Utd demolished Young Boys (sorry @senderos) 3-0. Lyon put away Man City 2-1. Juventus defeated Valencia 2-0 despite Ronaldo getting red carded. Real Madrid won against Roma 3-0.
he Australian sharemarket rallied along with other global markets as investors shrugged off US-China trade-war risks and Chinese Premier Li Keqiang downplayed trade-war risks and tensions.
Following the old mantra “sell the rumour, buy the fact”, the global rebound started last night following the late surge in Chinese stocks yesterday, with commodity markets following in its wake.
The S&P-ASX 200 index opened up around 0.3 per cent, and extended gains to 0.6 per cent after Mr Keqiang said China would not devalue its currency in order to make its exports more competitive amid the trade war with the US.
But it slipped back to close up 28.3 points, or 0.46 per cent, at 6189.7 with miners leading the rebound as commodity prices rallied on expected Chinese moves to stimulate its economy to counter trade-war costs.
The Australian dollar jumped US0.3¢ to US72.50¢ on the China comments.
Mr Keqiang denied China was deliberately weakening the yuan and said “one-way devaluation” would do more harm than good to China’s economy.
He said policy-makers had implemented easing measures ranging from tax cuts to central-bank liquidity injections, but they had refrained from broad-based fiscal or monetary stimulus for now.
But pointing to a fresh escalation in global funding pressures and a US dollar shortage, government 10-year bond yields jumped 3.9 points to 2.76 per cent after US 10-years rose 5 points to 3.06 per cent in a sign emerging-market central banks could be selling to bonds for liquidity to support their currencies.
In the domestic banking system, the cost for borrowing dollars via repo from the Reserve Bank’s open-market operations jumped to 2.175 per cent from 2.095 per cent as pressures mounted towards quarter-end.
UBS strategists said further escalation in the trade-war were likely with more Us tariffs.
Taking into account the “expected bigger negative trade shock but also increased policy support”, hey expected China to ease policy further in 2019 but downgrade its growth forecast to 6.0 per cent and allows the yuan to weaken to 7.3 to the US dollar from 6.87.
“For 2019, weaker export growth should lead to China's current account surplus disappearing,” they said.
After a soft start the Shanghai composite index rallied to trade up 1.7 per cent at the close of the ASX.
Spot iron ore jumped 2.5 per cent to $US69.82 a tonne and copper leapt 2.4 per cent to $US6087 a tonne last night.
The S&P 500 and the Dow Jones Industrial Average rose on Wednesday, with the Dow hitting its highest closing level since late January, as rising Treasury yields boosted financial stocks and trade worries subsided.
Based on the latest available data, the Dow Jones Industrial Average .DJI rose 159.41 points, or 0.61 percent, to 26,406.37, the S&P 500 .SPX gained 3.62 points, or 0.12 percent, to 2,907.93 and the Nasdaq Composite .IXIC dropped 6.07 points, or 0.08 percent, to 7,950.04.
Source: Netwealth Morning Business Roundup
Thursday morning - help yourself to a Mushroom and Brie Omelette and Coffee made with Love.
In consideration of others, PLEASE include the STOCK CODE in all your posts.
Happy trading, play nicely and make informed decisions.
