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Three in a row

Three in a row

Global share markets rallied for the third day in a row as the US Senate passed a $2.2 trillion economic support bill. The bill contains measures to support individuals and businesses. Share investors are clearly impressed by the measures, but commodity and bond markets less so. A 3.3 million surge in US jobless claims from last week’s 281 thousand provided evidence of how badly the assistance is needed.

The US dollar fell again as sentiment moved back from extreme fear. USD/JPY dropped below 110, and the Australian dollar is back above 60 US cents. Commodity currencies fared better despite falls in key commodity markets. CMC’s Canadian dollar index lifted over 960, taking the two-day gain to 1.7%.

The growth positive package did not stop bonds from rallying. This could be the result of cash moving off the sidelines, but the support for safer havens could also represent a more moderate view of the impact of US stimulus. Commodity markets reflected more concern, with copper falling 1% and crude oil down almost 4%. In another sign of worry, gold moved higher.

Regardless, Asia Pacific futures are pointing to another strong day for regional stocks. Hang Seng, Nikkei and Australia 200 futures are all more than 3% higher than yesterday’s close. A read on Japan’s inflation rate is expected to show prices growing at an annual rate of 0.3%, but the global impulse could overwhelm local factors in trading today.

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