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DJ MARKET TALK: S&P/ASX 200 Recovers On US Stimulus Hopes-Traders

0427 GMT [Dow Jones] Australia's S&P/ASX 200 index is down 1.3% at 3936.5,
recovering strongly from a 2-year low of 3765.9. Traders point to a Bloomberg interview
of Harvard economist Kenneth Rogoff, where he says the Federal Reserve "certainly
should do something right away" in terms of quantitative easing to secure U.S.
economic recovery. Some traders still believe more quantitative easing is unlikely
because it would be an admission of failure of past quantitative easing to achieve a
sustainable recovery. Other positive factors for Australian shares included the 9% fall
in the Australian dollar in the past two weeks, China's money market swaps adjusting
to assume no more Chinese interest rate hikes - for the first time in two years, and the
Australian interest rate swaps market predicting 140 basis points of easing domestically
in the next 12 months. "That's three important boxes ticked today," says a
trader at Goldman Sachs. ([email protected])