ASX futures were 34 points higher or 0.47% at 7218 at 7:00am AEDT on Tuesday, suggesting a rise at the open.
U.S. stocks rose Monday as investors braced for a week filled with key market events such as consumer-price data and a Federal Reserve policy update.
The S&P 500 rose 1.3 percent, and the Dow Jones Industrial Average rose 1.5 percent. The Nasdaq Composite added 1.1%. The mere hope that the Federal Reserve was gaining the upper hand in the fight against inflation was enough to send indices higher for much of November, lifting the broad 500-stock S&P index to its highest level in three months. Inflation data have largely suggested moderation, stoking hopes that Federal Reserve officials will slow the pace of their interest-rate increases.
In commodity markets, Brent crude oil added 2.55 percent to $US 78.04 a barrel and gold was down 0.93% at US$1,780.
On local bond markets, Australia's 2 Year government bond yield moved higher to 3.07%, while the 10 year yield was higher as well at 3.38%. Overseas, yield on 2 Year US Treasury Notes rose to 4.04% and yield on 10 Year US Treasury Notes, fell to 3.61%.
The Australian dollar fell to 67.34 US cents compared to Thursday's close of 67.94. The Wall Street Journal Dollar Index, which measures the dollar against a basket of 16 currencies, was at 98.03.
Asia
Stocks in China tumbled as concerns about possible rate increases in coming months offset supportive global central bank meetings. Market momentum was also weighed down by the property sector and associated sectors such as furniture makers. China Vanke lost 5.0% and Poly Developments retreated 4.3%, reversing gains Friday. Jason Furniture (Hangzhou) Co.: -3.7%. Pharmaceuticals and transportation led the gainers. Zhangzhou Pientzehuang Pharmaceutical Co. rose 4.5% and Shanghai International Airport was up 1.2%. The Shanghai Composite Index dropped 0.9 percent to 3,179.04 and the Shenzhen Composite Index slid 0.7 percent, while the ChiNext index was 0.8 percent lower.
Hong Kong’s Hang Seng Index slipped 2.2% to 19463.63, pulled lower by Chinese property and tech stocks, after rising to a three-month high. Blue chip Country Garden Services tumbled 17% after its chairwoman pared her stake. Longfor Group slumped 11 percent and Country Garden Holdings dropped 5.2 percent. The Hang Seng Tech Index slid 4.0%, led by declines of more than 6 percent in Meituan and Baidu. Sunny Optical dropped 13% on disappointing November shipment numbers, while Li Auto fell 12% in the wake of its 3Q numbers. Some lenders outperformed. HSBC advanced 0.8% and BOC Hong Kong was up 1.0%. Investors are awaiting U.S. consumer inflation figures and this week’s Fed decision.
Stocks in Japan finished lower, led by declines in electronics and trading companies, as concerns lingered about the US interest-rate outlook. Lasertec declined 4.5% and Mitsubishi Corp. fell 1.8%. The Nikkei Stock Average lost 0.2% to 27842.33.
Europe
European stocks were lower in close on Wednesday as concerns around the region’s energy crisis and surging Covid-19 cases in China dampen investor sentiment.
The pan-European Stoxx Europe 600 lost 0.5 percent, the British FTSE 100 was down 0.4 percent, the German DAX fell 0.5 percent and the French CAC 40 dropped 0.4 percent.
Markets are responding to a sudden surge in natural gas prices in the wake of the wave of cold weather in western Europe, says IG analyst Joshua Mahony. “Better news on Chinese reopenings sentiment soon to ebb with nervousness on the massive explosion of Covid cases and the potential for more restrictions and protests.”
North America
U.S. stocks rose on Monday as investors braced for a big week for markets that stand to see data on consumer prices and an update on the Federal Reserve’s policy strategy.
The S&P 500 rose 1.3 percent, and the Dow Jones Industrial Average was up 1.5 percent. The Nasdaq Composite added 1.1 percent. All three indexes finished the week in negative territory as far stronger-than-expected data on producer prices stoked anxiety over the outlook for inflation.
Belief that the Federal Reserve was making progress in its fight against inflation aided indices in rallying through much of November, raising the broad S&P. 500 to a three-month high. Most inflation data have provided evidence of a slowing in inflation, raising hopes that Fed officials will start to slow the pace of their rate increases.
“I think we saw peak Fed and peak inflation,” said Jason Ware, partner and chief investment officer at Albion Financial Group. “We still have a little bit of tightening to go, but not a lot of it. That is much more the end than the beginning.”
Next week could prove make-or-break for those hopes, with US consumer-price index data due Tuesday preceding a series of central bank meetings. The Fed is scheduled to release its policy decision on rates and its updated economic projections on Wednesday, and most investors are betting that the bank will raise its benchmark interest rate by half a percentage point. The European Central Bank and the Bank of England are scheduled to meet and announce interest rate decisions on Thursday.
“There’s been a sea change in terms of the underlying sentiment and a lot of that really has been around the positive influence of the CPI numbers turning south,” said Charles Diebel, head of fixed income at Mediolanum International Funds. “If the market is so jumpy, a screw-up in the C.P.I. will get a big negative reaction.”
The energy and utilities sectors were the S&P 500’s best performers, each up by more than 1% and extending their outperformance this year.
