Australian shares are expected to drift lower, even though Wall Street was boosted by subsiding US-China trade tensions.
Markets at 7:10am (AEST):
- ASX SPI 200 futures -0.2pc, ASX 200 (Monday close) flat at 6,085
- AUD: 75.8 US cents, 56.42 British pence, 64.29 Euro cents, 84.17 Japanese yen, $NZ1.09
- US: Dow Jones +1.2pc at 25,013, S&P 500 +0.7pc at 2,733, Nasdaq +0.5pc at 7,394
- Europe: FTSE +1pc at 7,859, DAX (closed for public holiday), Euro Stoxx 50 -0.5pc at 3,574
- Commodities: Brent crude +1.3pc at $US79.52/barrel, spot gold +0.1pc at $US1,292.29/ounce
The world’s biggest economies agreed to place “on hold” their trade differences, dialling back their threats to impose tariffs on each other.
Over the weekend, negotiators from both countries said they would continue discussing measures in which China would import more commodities from the US.
America, in particular, is keen to narrow its $US335 billion annual trade deficit with China.
Wall Street surges
The Dow Jones index jumped 298 points, or 1.2 per cent, to 25,013 — its highest closing figure in more than two months.
The S&P 500 rose 0.7 per cent, while the Nasdaq lifted by 0.5 per cent.
“The big news over the weekend was that a trade war was averted, and so we had an adjustment, covering bets that there would be negative news coming out of the discussion,” said Bucky Hellwig, senior vice president at BB&T Wealth Management.
“We’re seeing companies that do more of their business on an international basis do well.”
Industrials was the best performing S&P sector overnight, gaining 1.5 per cent.
Shares in aviation company Boeing, which sells a quarter of its commercial aircraft to Chinese customers, jumped 3.6 per cent.
US conglomerate General Electric gained 1.9 per cent, after confirming it would merge its transportation business with rail equipment maker Wabtec, which jumped about 3.5 per cent.
The Australian dollar surged 0.9 per cent to 75.8 US cents.
It also lifted sharply against the British pound (+1pc), euro (+0.6pc) and Japanese yen (+1.2pc).
The UK currency was sold-off as Brexit negotiations resume this week.
It also did not help that weekend newspapers reported that the Conservative Party was preparing for another election this year amid an impasse over Brexit.
The euro fell sharply as political uncertainty continued in Italy — with its two populist parties expected to agree on a prime minister soon, 11 weeks after general elections were held.