ASX 200 to rise despite weak Wall Street closing

Image Source: ©Ymgerman | Megapixl.com

Highlights

  • The Australian share market is likely to inch higher despite a disappointing start to the week on Wall Street.

  • According to the latest SPI futures, the ASX 200 is expected to open 24 points or 0.35% higher.

  • On Wall Street, the Dow Jones rose 0.083%, the S&P 500 dropped 0.4%, and the NASDAQ ended 1.2% higher.


The Australian share market is likely to inch higher on Tuesday despite a disappointing start to the week on Wall Street. The domestic mining stocks may gain on news of relaxation of COVID-19 curbs from China while downbeat economic data from world's top steel producer is expected to dampen investor sentiment, rekindling recession woes.

According to the latest SPI futures, the ASX 200 is expected to open 24 points or 0.35% higher. On Monday, the benchmark index rose 0.25% to 7,093 points.

The major events this week include the latest Reserve Bank of Australia’s (RBA) meeting minutes on Tuesday, wage price data on Wednesday and April’s labour force report on Thursday.

On Wall Street, the Dow Jones rose 0.083%, the S&P 500 dropped 0.4%, and the NASDAQ ended 1.2% higher.

In Europe, the Stoxx 50 fell 0.5%, the FTSE rose 0.6%, the CAC dipped 0.2%, and the DAX ended 0.5% lower.

MSCI's gauge of stocks across the globe closed down 0.21%. Emerging market stocks rose 0.30%.

Chinese retail and factory activity fell sharply in April as COVID-19 lockdowns severely disrupted supply chains while New York's factory output slumped in May for the third time this year amid a collapse in new orders and shipments.

Bond yields

  • 2-year yield: US 2.57%, Australia 2.53% (US prices as of 4.59 PM in New York)
  • 5-year yield: US 2.83%, Australia 3.04%
  • 10-year yield: US 2.88%, Australia 3.38%, Germany 0.93%

The dollar index fell 0.316%, while the euro was up 0.18% at $1.0431. The Japanese yen 0.09% firmer at 129.07 per dollar.

Oil prices rise

Oil rose as the European Union stepped closer to an import ban on Russian crude and traders viewed signs that the COVID-19 pandemic was receding in the hardest-hit areas of China, suggesting a significant demand recovery was in the works.

  • WTI futures settled up US$3.71 at US$114.20 a barrel.
  • Brent rose US$2.69 to settle at US$114.24 a barrel.

Gold prices inch higher

Gold rose slightly as declining Treasury yields offset headwinds from a relatively firm dollar that, along with the prospect of interest rate hikes, had pushed bullion to a more than 3-1/2 month low.

  • US gold futures settled up 0.3% at US$1,814 an ounce.

Meanwhile, Bitcoin last fell 5.21% to US$29,664.88.

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