Shares and important industrial commodities rose in overnight trading as services PMIs showed economic expansion in major economies. German, French and British stock markets are within a few percent of all-time highs, and the US S&P 500 and Nasdaq Composite indices set new records.

Authorities in Beijing announced cuts to fees and taxes, and support for banks, in response to the economic impact of the coronavirus outbreak. Copper ended its worst run of losses, rallying by almost 2% after dropping for 14 straight days. Crude oil also gained, despite a build in US inventories. The lift in industrial commodities indicate increasing confidence about the global demand outlook.

In the past 24 hours Japan, China, Italy, France, Germany, the UK and the US all released services and composite economic activity indices. Every reading showed expansion in January. ADP data showed US jobs grew by 291,000 in January, smashing estimates closer to 160,000. The macro evidence of rude economic health around the globe is a key factor in the overnight gains.

The US dollar and commodity currencies firmed on the increasing optimism.

Futures markets point to opening strength in Australia, Japan and China. Unsubstantiated reports of a “cure” for the newly discovered coronavirus may have played a part in the overnight gains. The World Health Organisation denied these rumours, but trading was largely unaffected. Markets are now pricing a temporary and minor impact of the outbreak. Any evidence to the contrary could see sentiment reverse sharply.

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