ASX poised to open higher following a rebound in US stocks

Stock Markets

Australian shares are poised to open higher today as investors await the release of the Australian fourth quarter CPI data today. If the figure is greater than the forecast of 0.4%, this release would have a positive effect on the AUD since it would lead to the central bank raising interest rates to contain inflation. Wall Street’s main benchmarks closed mixed as investors assessed more corporate earnings reports.  The Dow Jones and S&P 500 were marginally up overnight, with the indices gaining 51.74 (+0.21%) and 2.12 (+0.080%) points respectively. Conversely, the NASDAQ 100 was down 64.30 (-0.96%) points.

The Conference Board released their report on US consumer confidence yesterday. The report showed that the actual figure was 120.2 which was less than the forecast of 125.0 and highlighted that consumers were more pessimistic and saw an increase in the percentage of consumers that expected business conditions to worsen in the next six months.

The FOMC rate decision statement is scheduled for today and the US Jobs report and related data for January is to be released on Friday at 8:30AM ET. ASX200 futures are currently up 7.0 points. 

Commodities and Currencies

Brent crude prices experienced a strong rise in earlier weeks benefitting from hopes that OPEC will manage to achieve production cuts. Brent crude has rebounded 2.2% after retracing 3.2% on Monday and is now sitting at $US61.25 a barrel.

Iron ore prices continued their rally following another tailings dam disaster at a Vale-owned mine in Brazil. Iron ore is currently up 0.6% to $US78.69 per tonne.

The spot price of gold is up about $7.35 (+0.56%) and is now hovering around US$1310.45. Having cleared the resistance at $US1299 the spot price of gold is likely to break to $US1311 in the coming week.

The AUD is currently marginally up and is sitting at US71.55¢ (+0.05%). The AUD is expected to rise if the Australian fourth quarter CPI data is favourable and exceeds the forecasted figure.

This article was written by Mithun Fernando – Investment Analyst, Rivkin Securities Pty Ltd. Enquiries can be made via mithun.fernando@rivkin.com.au or by phoning +612 8302 3633.