The sharemarket is set to open higher on Monday, after Wall Street bounced last week amid hopes the US Federal Reserve will keep interest rates on hold.
The sharemarket is set to open higher on Monday, after Wall Street bounced last week amid hopes the US Federal Reserve will keep interest rates on hold, and as investors await the Reserve Bank’s next move.
It’s a stunning turnaround from just a week ago, when Wall Street was reeling after the S&P 500 had fallen 10 per cent below its high point for the year. That sent Wall Street’s main index into what investors call a “correction.” Before last week week, stocks had been struggling under the weight of rapidly rising Treasury yields. Those yields were in turn catching up to the Fed’s main interest rate, which is above 5.25 per cent and at its highest level since 2001.
Analysts said Friday’s jobs report offered encouraging signals for the Fed, with average hourly earnings rising less in October from September than expected, though it doesn’t mean the job is done. For investors around the world, the “Fed matters more than other central banks,” and weak U.S. data is “the only game-changer for markets,” foreign-exchange strategists at Bank of America wrote in a BofA Global Research report.
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