ASX 200 to rise; US stocks jump on economic data

3 min read | May 27, 2022 07:57 AM AEST | By Ashish

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ASX 200 to rise; US stocks jump on economic data — Image source: ©Ymgerman | Megapixl.com

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Highlights

The Australian share market is set to end the week on a positive note.

According to the latest SPI futures, the ASX 200 is likely open 69 points or 1% higher on Friday.

On Wall Street, the Dow Jones surged 1.6%, the S&P 500 rose 2%, and the NASDAQ jumped 2.7%.

The Australian share market is set to end the week on a positive note following a robust overnight trade on Wall Street after minutes from the latest US Federal Reserve meeting indicated the central bank would remain flexible on rate hikes later in the year to address inflation.

According to the latest SPI futures, the ASX 200 is likely open 69 points or 1% higher on Friday. The benchmark index fell 0.7% to 7,105.9 points on Thursday.

On Wall Street, the Dow Jones surged 1.6%, the S&P 500 rose 2%, and the NASDAQ jumped 2.7%. Data on Thursday showed the number of Americans filing new claims for unemployment benefits fell more than expected last week as the labor market remains tight.

In other economic news, the updated GDP data released by the Commerce Department on Thursday showed that the US economy declined 1.5% in April, more than its advance estimates of 1.4%. However, the positive sentiments from retail earnings outshined the GDP data.

In Europe, the Stoxx 50 rose 1.7%, the FTSE surged 0.6%, the CAC gained 1.8%, and the DAX ended 1.6% higher.

The MSCI's benchmark for global stocks was up 1.5% at 3:30 PM EDT (1930 GMT). The MSCI's broadest index of Asia-Pacific shares outside Japan rose 0.08%.

Bond yields

US Treasury yields edged up on Thursday after the benchmark 10-year note hit a fresh six-week low, with inflation fears continuing to dissipate as macro data and corporate announcements point to slower economic growth.

2-year yield: US 2.47%, Australia 2.34% (US prices as of 4.28 PM in New York)
5-year yield: US 2.70%, Australia 2.93%
10-year yield: US 2.74%, Australia 3.20%, Germany 0.99%.

The dollar plunged to the one-month low hit on Tuesday. The dollar index fell 0.225%, while the euro was up 0.37% at US$1.0719.

Oil prices rise

Oil prices climbed about 3% to a two-month high on Thursday on signs of tight supply ahead of US summer driving season, as the European Union (EU) wrangled with Hungary over plans to ban crude imports from Russia over its invasion of Ukraine.

Brent futures rose 3.0% to settle at US$117.40 a barrel.

WTI crude rose 3.4% to settle at US$114.09.

Gold prices inch higher

Gold prices rose despite Federal Reserve's aggressive monetary policy tightening plan.

US gold futures settled up 0.07% at US$1,847.6

Iron ore prices dip

Chinese iron ore futures touched a one-week low on Thursday as downstream demand remained muted, while investors fretted over cues that the world's second-largest economy is contracting in the second quarter amid COVID-fuelled chaos.

The most-traded iron ore futures on the Dalian Commodity Exchange for September delivery fell as much as 4.1% to 806 yuan (US$119.99) a tonne, the lowest since 19 May 2022.

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