ASX 200: What you need to know before the market opens?

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Summary

  • The ASX 200 is all set to continue its momentum and with a positive opening of 0.5% or around 35 points.
  • On Wall Street, the Dow Jones Industrial Average notched up higher by 0.48% while the S&P 500 increased by 0.36%.
  • Gold prices rallied to a seven-week high, recording their biggest weekly percentage gain of about 4.5% since early November 2020.

On Friday, the Australian market finished the week on a positive note, gaining 0.98% for the week. The benchmark index also closed at the highest level in the last 14 months, at 7063.5. Today, the ASX 200 is all set to continue its momentum and with a positive opening of 0.5% or around 35 points.

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On Wall Street, the Dow Jones Industrial Average notched up higher by 0.48% while the S&P 500 increased by 0.36%, both closing at record highs. The Nasdaq Composite added a mere 0.1% as declines in the information technology sector weighed.

Government stimulus, strong corporate earnings from U.S. banks and in Europe, coupled with the signs of economic recovery in countries accelerating the COVID-19 vaccination drive have all helped push stock market indices to new record highs last week.

According to Refinitiv data, the first-quarter earnings are expected to be higher by around 30.9% over the previous year, the highest since late 2010 when the economy was coming out of financial crisis.

According to the Commerce Department, the US homebuilding increased to a record high in nearly 15 years, in March 2021. Also, the robust retail sales data the prior day suggested the economy was roaring.

Chinese data recorded a massive growth of 18.3% in the first quarter that drove Asian markets higher on Friday. Retail sales numbers also bounced sharply last month.

The US dollar fell to a 4-week low after the sharp fall in the benchmark US Treasury yields on Thursday, as investors increasingly accepted the Fed’s decision to keep an accommodative policy stance for longer than expected.

The dollar index dipped 0.14%, with the Australian dollar fell 0.23% to 0.7732 on Friday.

The yield on U.S. 10-year Treasuries increased 6.6 basis points on Friday in a late surge to 1.594%, rebounding from multi-week lows hit on Thursday.

Read More: China exports rise in 2021 as demand goes up

Gold prices rallied

Gold prices rallied to a seven-week high, recording their biggest weekly percentage gain of about 4.5% since early November 2020 as the fall last week in the US Treasury yields and a weaker dollar brightened the safe heaven’s appeal.

Image Source: ID 2013267 © Anchesdd | Megapixl.com

The US gold Futures settled 0.8% higher at US$1,780.20 an ounce.

The Australian gold miners such as De Grey Mining Limited (ASX:DEG), Resolute Mining Limited (ASX:RSG), Newcrest Mining Limited (ASX:NCM) and Northern Star Resources Limited (ASX:NST) could trade higher today.

Read More: Resolute Mining (ASX:RSG) Shares Fall on Production and Guidance Update

Crude oil price softened

Oil fell slightly after a week of gain built on strong U.S. and Chinese economic data that negated the concerns regarding rising COVID-19 infections in other major economies.

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Brent crude Futures settled down 17 cents at US$66.77 a barrel and WTI crude Futures fell 33 cents to settle at US$63.13 a barrel.

Oil producers such as Santos Limited (ASX:STO), Woodside Petroleum Limited (ASX:WPL), Oil Search Limited (ASX:OSH) and Vintage Energy Limited (ASX:VEN) could show some weakness today.


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