Global markets were mainly stronger overnight, with a mixed session in Europe morphing into a positive session in the US. U.S. stocks snapped a three-session decline in the Standard & Poor’s 500 Index, as the Fed announced it will keep up its bond buying to stimulate the economy and euro-area leaders weighed options for Cyprus.
More than three years into the expansion the Fed is pressing on with open-ended purchases of Treasury and mortgage securities to boost the pace of growth and heal a labor market still scarred by the deepest recession since the Great Depression.
The Dow added 56 points (+0.4%) to settle at 14512, whilst the S&P put on 10 points (+0.7%) to settle at 1559. In Europe the FTSE shed just nine points and the German DAX rallied 0.7% as investors speculated that the ECB will continue to support the country’s banks until next week, after lawmakers in the Mediterranean nation rejected an unprecedented levy on bank deposits.
Oil rose the most in almost two weeks after the Federal Reserve said it will keep up its pace of bond buying to spur economic growth and U.S. inventories unexpectedly dropped.
Crude oil for April delivery, which is now expired, rose 80 cents (+0.9%) to settle at $92.96 on the NYMEX – the biggest gain since 7 March. The more actively traded May contract was up 98 cents (+1.1%) at $93.50.
Elsewhere, copper rebounded from the lowest price since August after Morgan Stanley predicted increased demand in China, the world’s biggest user.
In the currency space, the euro strengthened from a four-month low against the greenback as Cyprus sought alternatives to the European Union plan to help the nation avoid a banking collapse and the Federal Reserve maintained stimulus measures.
Today’s session will ring us the latest RBA bulletin, at 11:30am AEDT.