Australian shares opened strongly this morning with the S&P/ASX 200 index rising 0.5 per cent to 5364.5 points, taking a lead from offshore markets.
Wall Street closed on a record high, with the market cheering on the seemingly contradictory forces of stronger economic news via jobs data and the view that interest rates would stay lower for longer.
The S&P 500 rose about 0.3 per cent, edging above its previous closing high of 2,130 with increases across most sectors, while European equity markets also enjoyed hefty rises.
However, IG chief market strategist Chris Weston said last night’s US gains lacked conviction.
The S&P 500 has printed a new high, but the price action is hardly inspirational and there was seemingly a level of caution in the buying.
The prospect of a new prime minister in the UK saw the FTSE 100 rise strongly in London as worries about the Brexit vote diminished.
The pound also gained after prime ministerial candidate, Andrea Leadsom, withdrew from the race leaving UK Home Secretary, Teresa May, on the way to replace outgoing British prime minister, David Cameron.
The Australian dollar was down slightly at US75c.
There was finally some signs of a break in the stampede towards bonds with bond yields across Europe closing up on lower investment demand.
Commodities were a mixed bag, with oil falling on increased Canadian production and US rig counts edging up. Gold finally fell on the outbreak of good news, while iron ore steadied ahead of Friday’s Chinese GDP data and base metals on the LME (London Metals Exchange) were higher.
Today’s data centres on readings of post-election confidence, with ANZ publishing a consumer reading and the NAB trotting out its monthly take on business conditions and confidence.