- The ASX 200 is set for a higher opening by 0.2% or 15 points, as indicated by ASX 200 Futures.
- The US economy is expected to do well in the next couple of months and the bond market sell-off could return.
- Oil prices continued their uptrend and were on track to hit six-week highs.
On Thursday, the Australian market was seen making a new 52-week high as the market continued its uptrend. The benchmark index closed the session 0.25% or 17.6 points up at 7082.3, after retracing from the high of 7096.9, which is the new 52-week high for the index. Today, the ASX 200 is set for another higher opening by 0.2% or 15 points, as indicated by ASX 200 Futures.
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The global equity indices extended their rally and the US Treasury yields inched up higher on Thursday, after strong U.S. economic data and the Federal Reserve's unchanged stance for supporting the economy fueled confidence amongst investors.
The U.S. economic growth picked up pace in the first quarter of 2021, fueled by a massive government stimulus for businesses and households, paving the way for what is expected to turn out to be the strongest annual economic recovery in nearly four decades.
Some analysts are also seeing the second quarter for a further acceleration in growth as the re-openings continue and assuming that COVID-19 variants remain contained. The Mayor of New York City, Bill de Blasio plans to "fully reopen" the city on 1 July, after more than a year of closures and restrictions.
On Wall Street, the Dow Jones rose 0.71%, to 34,060.36, while the S&P 500 gained 0.68%, to 4,211.47, closing at a record high. The NASDAQ Composite shot up 0.22%, to 14,082.55, after retracing from the intraday high of 14,211.57.
The economy is expected to do well in the next couple of months and the bond market sell-off could return, making Treasury yields attempt to test the end of March highs. The Benchmark 10-year Treasury notes fell 4/32 in price to yield 1.634%, compared to 1.62% on Wednesday.
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The US dollar stayed just off nine-week lows as the Fed's dovish outlook and bold spending plans from the government have provoked inflation worries. The dollar index rose 0.08%, while the Australian dollar fell 0.32% to 0.7764.
On Wednesday, the Fed Chair Jerome Powell said that "it is not time yet" to discuss any change in policy after the U.S. central bank left interest rates and its bond-buying program unchanged, despite projecting a more optimistic view of the country's economic recovery.
The Fed's unchanged interest rates, robust U.S. corporate earnings and the conviction that President Joe Biden is going big on infrastructure spending, helped equities market to rise.
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Crude oil continued to rise
Oil prices continued their uptrend and were on track to hit six-week highs as a weak dollar, strong U.S. economic data and an expected pick up in demand outweighed concerns about rising production and the impact of exponential increase in the COVID-19 cases in India.
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Gold price softened
Gold price retraced back as U.S. Treasury yields gained. Spot gold dropped 0.4% to US$1,773.60 an ounce while the US gold Futures was 0.3% down, at US$1,768.3.
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