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Shares rise on doves’ wings

Shares rise on doves’ wings

European and US shares lifted in overnight trading as investors backed the nomination of IMF head Christine Lagarde to the European Central Bank. Lagarde is viewed as a dove, and is likely to continue current ECB chief Mario Draghi’s accommodative stance.

Comments from US President Trump that China and Europe are “playing big currency manipulation game” also spurred share buying as traders speculated about a weak dollar Treasury policy.

US indices set new record highs, and commodity markets echoed the gains. Energy markets bounced as US weekly data showed draws in crude and gasoline. Base metals rallied, and gold dropped after failing to break through resistance at US $1,430.

Although forex markets were less convinced, the softer Euro and US dollar pushed most Asia Pacific currencies higher. USD/JPY is now below 108 and the Australian dollar is trading above US 70 cents.

Futures markets indicate a positive start to trading today, ahead of the US Independence Day holiday tonight. Woolworths will remain a focus for investors after yesterday’s announcement of a plan to spin off its liquor and hotel arms. Shareholders in Vocus will look for more support after yesterday’s drubbing, seemingly on the back of impatience at the implementation of its strategy turn around.


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