Global share markets rose modestly on good breadth overnight. Oil jumped after US data showed a large weekly draw on inventories, and the USD strengthened in response to stronger growth in import prices. Futures markets are pointing to a positive start for Asia Pacific bourses.
The Dow Jones Industrial Average finished the session down slightly, but both the S&P500 and Nasdaq Composite made small gains, reflecting the broadly positive market sentiment. All three indices remain within a whisker of all-time highs. The strength is all the more remarkable in light of what some describe as a Watergate style scandal brewing in Washington.
Higher oil prices should support the ASX 200 today, although ongoing pressure on industrial metals may contain enthusiasm. Crude oil markets sprung back on news of a 5.2 million barrel draw down on inventories. However the rally may not last long, as US production rose above 9.3 million barrels a day and inventories persist near record levels.
Today’s session is data light, although yesterday’s higher than forecast inflation reads may continue to support shares. A mild risk on mood is evident, but bond market rallies and a steady gold price suggest not all investors are pro-growth.