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.

Disclaimer: CMC Markets is an order execution-only service. The material (whether or not it states any opinions) is for general information purposes only, and does not take into account your personal circumstances or objectives. Nothing in this material is (or should be considered to be) financial, investment or other advice on which reliance should be placed. No opinion given in the material constitutes a recommendation by CMC Markets or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person. The material has not been prepared in accordance with legal requirements designed to promote the independence of investment research. Although we are not specifically prevented from dealing before providing this material, we do not seek to take advantage of the material prior to its dissemination.