ASX 200 likely to rise; Wall Street rallies

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Highlights

  • Australian shares are expected to rise at the open on Monday.

  • According to the latest SPI futures, the ASX 200 would open 24 points or 0.3% higher.

  • On Wall Street, the Dow Jones rose 0.6%, the S&P 500 surged 0.5%, and the NASDAQ ended flat.

Australian shares are expected to rise at the open on Monday following decent session on Wall Street last Friday. The market sentiment gained on hopes that the US Federal Reserve would back off its aggressive pace of monetary policy tightening. The US central bank is scheduled to hold its next policy meeting in December.

Surprisingly, the strong retail sales data last week hammered home the idea that the Fed will tighten monetary policy further even though soft consumer and producer price pressures suggested inflation has peaked and would allow rate hikes to ease.

According to the latest SPI futures, the ASX 200  would open 24 points or 0.3% higher. On Friday, the benchmark index ended 0.2% higher at 7,151.8 points.

On Wall Street, the Dow Jones rose 0.6%, the S&P 500 surged 0.5%, and the NASDAQ ended flat.

In Europe, the Stoxx 50 gained 1.2%, the FTSE surged 0.5%, the CAC rose 1%, and the DAX ended 1.2% higher.

Bond yields

Treasury yields rose for a second day on Friday following comments on Thursday by St Louis Fed President James Bullard, who said rates needed to rise to a range between 5% and 5.25% to be "sufficiently restrictive" to curb inflation.

  • 10-year yields: US 3.83% Australia 3.61% Germany 2.01%

Oil prices

Oil fell by more than US$3 a barrel, pressured by concern about weakening demand in China and further increases to US interest rates.

  • US crude fell 2.57% to US$79.54 per barrel.
  • Brent was at US$87.46, down 2.58% on the day.

Gold prices fall

Gold prices fell as the prospect of higher interest rates weighed on the precious metal.

  • US gold futures fell 0.30% to US$1,755.50 an ounce.


 


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