US news
9:24am: US stocks surged, with the S&P 500's second-best gain this year, after signs of stability in Chinese markets led global equities higher.
The key Wall St benchmark jumped 2.5 per cent, after the gauge's second-biggest weekly retreat in 2015. The Dow Jones rallied 2.4 per cent, while the Nasdaq advanced 2.7 per cent.
"Now that China showed that it was not going to break down further, our market is taking back what it lost on Friday," said Matt Maley, an equity strategist at Miller Tabak. "The market got hit hard on Friday because people were worried about China."
Equities around the world climbed today, led by China. A rally in Shanghai in the final hour of trading followed a pattern that has recently suggested state intervention to prop up the nation's equities. US stocks have turned more volatile in recent weeks amid concerns that a Chinese economic slowdown will weigh on global growth, while investors bet the Federal Reserve is on course this year for its first interest-rate increase since 2006.
Investors remain confident the Fed will raise borrowing costs this year, even as they pare bets on policy makers deciding to do so at a meeting next week. Traders are pricing in a 28 per cent chance the central bank will increase rates at this month's gathering, down from 48 per cent before China's currency devaluation on August 11. Odds of a move at the December meeting are 59 per cent, according to data compiled by Bloomberg.
"These next two weeks are very important -- the Chinese market has reopened, we have FOMC next week, we may get some guidance from US companies," said Pierre Mouton, from Notz, Stucki & Cie in Geneva. "When it comes to the Chinese situation, it's important that either you're positive and think the government can handle the situation and everything will come back to normal, or you're negative and think a downward spiral has started."
Wall St enjoyed its second best day for the year.
Wall St enjoyed its second best day for the year. Photo: Bloomberg
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need2know
9:11am: A strong start for the local sharemarket is in store on the back of a rally in global equities and commodities.
Here's what you need2know:
SPI futures up 42pts to 5142
AUD at 70.25 US cents, 84.26 Japanese yen, 62.72 Euro cents and 45.64 British pence
On Wall St, S&P 500 S&P +2.5%, Dow +2.4%, Nasdaq +2.7%
In Europe, Stoxx 50 +1.1%, FTSE +1.2%, CAC +1.1%, DAX +1.6%
Iron ore +1% to $US57.42 a dry ton on Tuesday
Spot gold up $US2.40 or 0.2% to $US1121.75 an ounce
Brent crude up $US1.74 or 3.7% to $US49.37 a barrel
What's on today:
Australia: Westpac monthly consumer confidence at 10:30am AEST, ABS July housing finance at 11:30am, RBA deputy governor Philip Lowe speech in Melbourne midday, RBA's Guy Debelle in London at 7pm
UK: manufacturing production, trade balance
Canada: rates decision, housing starts and building permits
