ASX poised to rise on growing US/China trade optimism

Stock Markets

Australian shares are poised to rise today as shares on Wall Street rallied on Friday amid increasing hopes that the US and China are close to hammering out a trade deal.  Senior US officials arrived in Beijing last week for five days of negotiations, with both the US and China reporting that significant progress had been made during the talks on how to resolve their trade dispute. Chinese President Xi Jinping said that the trade talks between the US and China will continue this week in Washington.

Wall Street's main benchmarks surged on Friday following positive comments from US President Donald Trump and China's President Xi Ping regarding the trade negotiations. The Dow Jones jumped 443.86 (+1.74%) points, marking its eighth consecutive weekly gain despite prior weakness in the Dow and S&P 500 induced by weaker than forecasted US retail sales data. The S&P 500, and NASDAQ 100 were also up on Friday, with the indices gaining 29.87 (+1.09%) and 32.76 (+0.47%) points respectively.

European stocks also closed higher on Friday on the back of growing optimism regarding US/China trade talks with the pan-European Stoxx 600 ending up 1.42%.

ASX 200 futures are currently up 53.0 points. 

Commodities and Currencies

Sharp output cuts from OPEC and Saudi Arabia have catalyzed a bullish run in oil prices and are assisting to overcome the growing concerns of a potential fall in demand for oil due to global economic slowdown. Brent crude has topped $US66 a barrel for the first time this year closing up 1.68% at $US66.25 per barrel. Meanwhile, WTI crude oil prices are edging towards a three-month high rising 1.18% and closing at $US55.59.

Iron ore prices are down 0.65% at $US84.10 per tonne.

The spot price of gold surged to a two-week high on Friday following weak US economic data releases boosting expectations that the US Federal Reserve would remain firm on monetary tightening. The spot price of gold rose 0.68% and is currently sitting around $US1321 an ounce.

The AUD is currently up 0.39% at US71.34¢.

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.