Share markets rose and crude oil recorded its best one-day gain overnight as investors contemplate a raft of new government and central bank support measures. The increased liquidity reversed recent bond weakness, although the US dollar rose for the eighth straight session. Promises of fiscal support eased the pressure, although mixed base metals trading suggests there is no “all-clear” on growth prospects yet.
The European Central Bank, the Reserve Bank of Australia, the People’s Bank of China and the Bank of England all lowered rates and/or boosted liquidity programs in the last twenty-four hours. Additionally the US government revealed details of its fiscal stimulus plans, including a one-off payment of $1,200 to lower income workers.
The bounce back in oil followed comments from President Trump that he would intervene on crude oil prices “at the appropriate time”. Crude markets leapt to a 36% gain, before settling back to finish up 25% for the session. The moves may see energy shares bounce today after weeks of relentless selling.
The share market gains came despite ongoing intra-day volatility. Both European and US stocks tumbled early in their respective sessions before rallying back to close 0.5% to 3% higher. Tech shares led the way. Tesla, Twitter and Netflix all rose more than 5%.
Future markets point to an opening surge in Asia Pacific shares. Major indices closed the overnight session 1.5% to 3.0% higher. Anticipated reductions in prime lending rates in China, due mid-session, could add to the positive momentum.