Comments from the head of the New York branch of the US Federal Reserve fuelled rallies across asset classes last night. John Williams virtually confirmed a cut on July 31, and raised the option of the Fed cutting harder. Interest rate markets are now pricing a 44% probability of a 0.5% drop in rates at the next Fed meeting.

Markets reacted accordingly. Bond yields dropped, shares rose and gold smashed through important resistance at US $1,430. Industrial metals rallied. Crude oil is the exception, pressured by Gulf of Mexico producers coming back on line after Hurricane Barry. A weakening US dollar aided the gains, and Bitcoin traded up through the $10,000 mark.

Futures markets indicate opening gains for Asia Pacific stock markets. A stronger quarterly report from Microsoft overnight may bring focus to companies that comprise global technology supply lines.

Australian investors are gearing up for the corporate reporting season with sales reports from leading resource groups. BHP, South 32, Woodside and Santos all revealed production and sales data this week. Most reported disrupted operations, and the resource sector may come under pressure as investors trim exposures.

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