Australian shares shrugged off weak Christmas retail sales this morning to stay on track for their highest close in two months.
At lunchtime the ASX 200 was up 47 points or 1.1% at 4299 as Asian markets joined a global rally following Friday's strong US jobs report. Cyclical sectors topped sector gains, led by materials +1.6%, metals & mining +1.6% and financials +1.3%. Defensive gold and utilities stocks were the only sectors to drop back.
Asian markets played catch-up with Friday's big surge in Europe and the US. Japan's Nikkei added 1.25% this morning, Shanghai 0.39% and Hong Kong's Hang Seng 1.06%. Dow futures were recently down 26 points or 0.2%.
"In the second half of last year, talk was all about whether the US will go back into a recession," Andrew Pease, chief investment strategist for the Asia-Pacific region at Russell Investment Group, told Bloomberg. "Now I think talk will be about what will be the strength of the recovery in the US. That's an important shift in the balance of risk."
The Reserve Bank was given plenty to think about this morning ahead of tomorrow's cash rate decision as retail sales disappointed, jobs ads surged and inflation remained subdued. Retail sales unexpectedly declined by 0.1% in the run-up to Christmas, the first fall in six months. Separate reports showed the biggest increase in jobs ads in two years and an easing in the annual rate of inflation from 2.4% to 2.2%.
Crude oil futures eased 25 cents this morning to US$97.51 a barrel. Spot gold rose $8.50 to US$1,734.40 an ounce. The dollar was buying US$1.0732.
A bonanza for BNE holders/traders this morning - lightning does strike twice. Well done. I couldn't bring myself to chase the price - more fool me. Instead I caught TOE at the low for a rebound that would have been nice with a full order fill. Just missed CTP at 5.4c. Nothing else doing so far but I'm watching a few.
