ASX 200 to rebound; Fed’s tapering plan could start by mid-November

Highlights

  • Australian shares are set to rise on Thursday, led by gains in big growth US stocks and tech-heavy NASDAQ.
  • The ASX 200 is expected to open the day 46 points or 0.65% higher after falling 0.1% to 7,272.5 points in previous session.
  • On Wall Street, the Dow Jones ended flat, the S&P 500 ended up 0.3%, and the NASDAQ traded 0.7% higher.

Australian shares are set to rise on Thursday, likely helped by gains in domestic gold and technology stocks on the back of firm bullion prices. In the overnight trade, Wall Street also finished higher led by gains in big growth stocks and tech-heavy NASDAQ.

The ASX 200 is expected to open the day 46 points or 0.65% higher after falling 0.1% to 7,272.5 points in previous session.

ASX 200 opens higher; Gold miners and tech companies take charge

On Wall Street, the Dow Jones ended flat, the S&P 500 ended up 0.3%, and the NASDAQ traded 0.7% higher. Minutes from the latest Federal Reserve policy meeting were released overnight. According to the minutes, Fed could begin reducing the pace of its monthly asset purchases in mid-November.

Image Source: @ Kalkine Media

Bonds and dollar

US yield curve was flattened by bets of tighter monetary policy.

  • 2-year yield: US 0.36%, Australia 0.09%
  • 5-year yield: US 1.08%, Australia 0.99%
  • 10-year yield: US 1.55%, Australia 1.69% Germany -0.13%

On the other hand, the dollar took a breather on Wednesday.

  • The dollar fell 0.42% to 94.033 from the one-year high of 94.563 struck previous day. A softer dollar helped the euro to jump 0.56% from a near 15-month low to US$1.15945.
  • The Japanese yen also bounced back, rising 0.23% to 113.27 per dollar.

Oil prices fall

Oil prices softened amid demand concerns. Oil prices paused their rally, as some investors questioned whether inflation and other supply chain issues will crimp economic growth and ultimately energy demand.

  • WTI fell 0.15% to US$80.52 per barrel.
  • Brent was at US$83.27, down 0.18% on the day.

Gold price jumps

Gold prices were boosted due to weakness in the US dollar and bond yields.

  • Spot gold rose 1.9% to US$1,792.91 an ounce.
  • US gold futures climbed 1.92% to US$1,792.00 an ounce.

Meanwhile, iron ore prices fell following a formal announcement on upcoming winter restrictions by China’s Ministry of Industry & Information Technology.

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