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Morning markets: Wall Street rallies on weaker data that lowers rate rise risk

Friday, 16 Sep 2016 06:43:52 | Rebecca Hyam Rebecca Hyan

The bulls were back in control on US market, with buyers plentiful overnight. (AFP: Getty Images/Scott Olson)

Markets in New York rallied overnight, with some weaker-than-expected economic data reducing the likelihood of an interest rate rise in the United States this month.

Markets at 8:30am (AEST):

  • ASX SPI 200 futures +0.6pc to 5,262
  • AUD: 75.15 US cents, 66.9 euro cents, 76.72 Japanese yen, 56.75 British pence, $NZ1.0265
  • US: Dow Jones +1pc to 18,212, S&P 500 +1pc to 2,147, Nasdaq +1.5pc to 5,250
  • Europe: EuroStoxx +0.3pc to 2,974, FTSE 100 +0.9pc to 6,730, DAX +0.5pc to 10,431
  • Commodities: Iron ore flat at $US55.50/tonne, Brent crude +1.2pc to $US46.40/barrel, spot gold -0.5pc $1,316/ounce

A recovery in oil prices and Apple's fourth straight day of solid gains also helped to boost Wall Street.

Official figures revealed retail sales and industrial activity fell by more than forecast in August.

Separate reports showing a slowdown in jobs growth and a plunge in manufacturing activity also contributed to lower expectations that the Federal Reserve will raise rates at its meeting next week.

Brent crude prices rose by more than 2 per cent, offering some support to energy stocks.

European markets also bounced back overnight, with London's 0.9 per cent rise well ahead of the continental markets.

The local market is on track for a solid start with the ASX SPI 200 up 0.6 per cent.

However, IG's chief market strategist Chris Weston said it is unlikely to be enough to offset losses earlier in the week.

"A rally into 5,284 should be seen on open, but a fifth week of losses seems assured unless we can find an extra wind to take us through last week’s closing price of 5,339, but that would need to be some tail wind!" he exclaimed in a note.

"We haven't seen five consecutive weekly loses since September 2014."

Mr Weston said all eyes in the market are now trained firmly on key central bank meetings concluding next Wednesday (with the Fed outcome known a few hours before Australia's Thursday market open).

"The bigger question remains what will the Fed say next week and what will the BoJ do (or not do), in what promises to be a crazy 24 hours of central bank watching on Wednesday," he said.

The Australian dollar was back above 75 US cents, having strengthened overnight.

Today's agenda:


Australia:
  • APN extraordinary general meeting (9:00am AEST)


US:
  • Inflation – August (10:30pm AEST)

AustraliaPlus


 

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