Add Category
Posted
A multi-billion-dollar weapons deal between the United States and Saudi Arabia helped to boost defence-related stocks on Wall Street in the overnight trading session.
Markets at 7:45am (AEST):
- ASX SPI 200 futures +0.20pc to 5,794
- AUD: 74.73 US cents, 57.49 British pence, 83.16 Japanese yen, 66.49 euro cents, $NZ1.068
- US: S&P 500 +0.51pc to 2,394, Dow Jones +0.43pc to 20,894, Nasdaq +0.82 pc to 6,133
- Europe: Euro Stoxx -0.24pc to 385, FTSE +0.34pc to 7,496
- Commodities: Gold +0.42pc to $US1,260.31/ounce, Brent crude +0.2pc to $US53.74/barrel
US President Donald Trump was in Saudi Arabia over the weekend and secured lucrative deals for Riyadh to buy US arms.
Technology shares were another standout performer, with Amazon, Microsoft and Apple driving the best gains on the S&P 500 Index and the Nasdaq.
In economic news, the Chicago Fed activity index rose from 0.07 to 0.49 (versus 0.11 expected) in April.
The index is a weighted average of 85 indicators and the recent boost was mostly driven by production-related components.
The president of the Dallas Federal Reserve and Federal Open Markets Committee member, Robert Kaplan, said he expected to see two further interest rate rises in the US this year.
In an essay published on his website, Mr Kaplan said economic growth was likely to rebound over the rest of 2017 due to stronger consumer spending and business fixed investment.
He forecast a 2.25 per cent growth rate for the entire year.
It was a mixed bag in Europe, with London the only major market to book gains overnight.
A poll showing British Prime Minister Theresa May's Conservative party losing ground led to a fall in the value of the pound.
That was welcomed by export-related listed companies, sending the FTSE 100 slightly higher.
Merkel's 'music to Trump's ears'
German Chancellor Angela Merkel said Germany's solid export earnings were being driven by two things over which her government has no influence, namely the euro's exchange rate and oil prices.
Speaking to students at a school in Berlin, Ms Merkel said the euro was too weak and that Germany's products are too cheap in relative terms.
NAB's director of economics David de Garis says those comments would be welcomed across the Atlantic.
"That will be music to President Trump's ears," he said.
"Whether the Chancellor's comments were meant at all for the ears of the ECB (European Central Bank) and not just for the students she was speaking to, ECB council member and Bundesbank president Jens Weidmann noted that price pressures are still muted.
"He also said that the ECB will need to act when prices rise with policy normalisation to come if the recovery lifts wages."
At 7.45am AEST, West Texas Crude oil was higher at $US50.76 a barrel, the price of a barrel of Tapis had edged up to $US54.09 and spot gold had increased to $US1,260.31 an ounce.
Topics: stockmarket, currency, markets, futures, money-and-monetary-policy, donald-trump, united-states, united-kingdom, european-union, australia