US markets strengthened overnight, with the Dow inching towards a new all-time high despite lingering concerns over China’s economy. Asian markets suffered sharp falls yesterday on reports China’s new round of property sector controls will hamper its economic growth.
However, US investors shrugged off this concern and instead cheered comments from Fed Chairman, Janet Yellen, who said the US central bank should continue its 85 billion dollar a month monetary easing program.
The Dow climbed 38 points (+0.3%) to 14128, whilst the S&P500 rose 0.5% and the Nasdaq put on 0.4%.
In commodity markets, gold arrested its recent run of declines on hopes central banks in Europe and the US will continue their quantitative easing policies. Bullion was flat at US$1573 an ounce. Elsewhere, oil slipped 0.6% to US$90.20 a barrel on concerns China’s slowing economy will curb energy demand.
The euro was flat against the greenback as traders speculated the ECB will soon cut interest rates in response to the recent soft batch of economic data. In local economic news, retails sales and the current account are due for release at 11:30am, AEDT.
The day’s big event, however, is the RBA interest rate decision, scheduled for 2:30pm, AEDT. Expectations are the central bank will leave the official cash rate unchanged at 3.00%.