Thanks Endless.
Half-time round-up:
A sharp acceleration in economic growth last quarter helped Australian shares retain yesterday's gains as Asian markets and US futures rallied this morning.
At lunchtime the ASX 200 was ahead two points or less than 0.1% at 4046 after the quarterly GDP report came in twice as strong as economists expected. Gains in gold stocks +1.7%, property trusts +1.9% and energy +0.6% offset declines in telecoms -0.7%, financials -0.6% and industrials -0.3%.
"I'm picking my jaw off the table," Commonwealth Bank chief economist Michael Blythe told Fairfax after the March quarter delivered growth of 1.3%. Economists had been predicting a figure around 0.6%. "As Treasury secretary Martin Parkinson said the other day 'We should all remember that we're not living in Greece'," Mr Blythe said. "These kinds of numbers underline that point. It certainly shows the economy had a decent amount of momentum in the run-up to latest round of European woes and that's a handy position to be in."
A 1.6% rise in household consumption contributed around 90 basis points to GDP, which was up 4.2% from last March. Another key factor was a 2.5% rise in wages. The news helped push the dollar up nearly a cent to 98.41 US cents.
Asian markets rallied for a second session ahead of tonight's European Central Bank rates decision. Japan's Nikkei added 1.31%, Shanghai 0.1% and Hong Kong's Hang Seng 0.83%. Dow futures were recently up 51 points or 0.4%.
Crude oil futures rallied 73 cents this morning to US$84.83 a barrel. Spot gold was $6.80 stronger at US$1,625.40 an ounce.
That extraordinary GDP figure may help steady the nerves on global markets over the next 24 hours. You might wonder how fast China is slowing if the economy of a major supplier is still galloping along. World markets are already in a forgiving mood, which suggests a short-term rally may be in the offing. The overnight news from Spain was pretty grim and the G-7 conference call offered nothing, yet most markets still rallied. That said, this morning's ASX movements have yet to throw any trades at this desk.
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Thanks Endless. Half-time round-up:A sharp acceleration in...
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