Strong rallies in European and US stocks have set the scene for a surge at the start of share trading today.

Investors appeared to seize on the positive signals emanating from a hawkish Fed, driving gold lower, and the USD, oil and industrial metals higher. Asia Pacific futures markets are pointing to gains across the region in a classic “risk on” move.

Bank stocks in the US received strong support overnight as participants saw good news for bank margins in a more dynamic interest rate environment. US listed Australian banks and mining companies all rose, and given the 75% dominance of the market by financial and resource stocks, may mean a day of outperformance by the local index.

Following RBA Governor Glenn Stevens “unplugged” speech yesterday the AUD weakened, suggesting fears of a more hawkish central bank evaporated. Although this did not translate to gains in trading, it may be a factor in a catch up day today. Militating against the improved sentiment is the release of Programmed Maintenance’s full year result, showing a slide into the red.