The Nasdaq 100 index hit an all-time high in overnight trading as a global risk rally raged on. The US dollar weakened again, but commodity currencies, crude oil, copper and many major share market indices are at three month highs as central bank stimulus and re-opening optimism drive market action. Asia Pacific markets are set for a positive start.

The US Federal Reserve’s balance sheet grew by $2.5 trillion over the last three months, matching the value of the gain in the S&P 500 index. The support of central banks is crucial to the rally, increasing the focus on the Fed’s Open Market Committee meeting this week. Tomorrow night’s statement following the meeting, and any revision to the Fed’s economic projections, could inform trading.

Economic data continues to contradict the gains for risk assets. On Friday night US non-farm  payrolls produced a huge surprise. Instead of a further drop of 6.8 million jobs, there were 3.1 million jobs created in the previous week. However the unemployment rate stands at 13.3%, a level never seen outside a recession.

China trade data over the weekend also contained a positive surprise, as exports rose in yuan terms by 1.4%. A 16.7% drop in imports is more worrying, given the optimistic market view incorporates strong internal demand in China.

Futures markets point to opening gains across the region of between 0.5% and 1%. A lack of major data releases during the session could see currency markets take the lead. US share futures may also play a part, having started the out-of-hours session by adding to Monday’s gains.

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