Good morning team, Chris Conway your Chief Market and Trading Strategist here with your First Look.
SPI futures are pointing to a circa 20-point gain on the open this morning after US market finished higher overnight.
The big news from Wall Street was the Fed’s decision to raise interest rates by 25 basis points, which was widely expected.
The Fed also pointed to three more rate hikes next year, which represents no change in the all important dot plot.
Interestingly the Fed also changed its forecast for the economy in 2018, adjusting their growth forecast from 2.1% to 2.5% – a not insignificant increase but one that is attributed to the likely tax cuts that the Trump administration will deliver.
The Fed also believes that in subsequent years, growth will return to 2.1%, highlighting the short-term impact of the cuts.
More interestingly, the market’s probability for a March rate hike was unchanged and the market is still only anticipating 1-2 rate hikes next year.
Finally, it was Janet Yellen’s last press conference and quite possibly her last meeting, as she will moves aside for Jay Powell.
The Dow and S&P 500 held at records, and both locked in a fifth straight advance.
Commodities were mainly weaker, with oil and iron ore slipping, whilst gold firmed slightly.
What’s on today:
Local data: Consumer inflation expectations December, Labor Force November: employment change, unemployment rate, participation rate
Overseas data: China retail sales November, industrial production October; Japan Nikkei manufacturing PMI December; Euro zone Markit manufacturing PMI December, Markit services PMI December, European Central Bank policy meeting, Bank of England policy meeting, Norges Bank policy meeting, Swiss National Bank policy meeting; US retail sales November, Markit manufacturing PMI December, Markit services PMI December, Business inventories October
SPI futures up 26 points (+0.4%) to 6053
AUD +0.7% to 76.11 US cents
On Wall St: Dow +0.5%, S&P 500 +0.1%, Nasdaq +0.3%
In New York, BHP +0.5% Rio +1%
In Europe: Stoxx 50 -0.5%, FTSE -0.1%, CAC -0.5%, DAX -0.4%
Spot gold +0.2%
Brent crude -1.4%
US oil -0.8%
Iron ore -1% to $US70.54 a tonne
Dalian iron ore +0.3% to 502.5 yuan
LME aluminium -0.3% to $US2009 a tonne
LME copper +1% to $US6729 a tonne
10-year bond yield: US 2.38%, Germany 0.31%, Australia 2.52%
What happened overnight: