Australian shares are set to open higher. US jobless claims data eases outlook worries. Gold above $US2400/oz. Oil eyes $US80/bbl. Bitcoin reaches for $US60,000.
Australian shares are poised to rise, in line with a rally in New York, after the latest weekly jobless claims data helped further ease concerns about the US economy falling into recession. Gold and oil rallied, as did bitcoin.
“Markets, Fed officials and economists can all collectively let out a great big sigh of relief that no, a recession is not coming, or at least the weekly job layoffs are not as bad as feared,” said Chris Rupkey, chief economist at FDWBonds. “The Fed does not have to hurry and move from its position of seeing balanced risks.”In addition, the Atlanta Fed released its latest GDPNowcast update, and it estimates that real GDP growth in the third quarter of 2024 is 2.9 per cent.
“However, in some cases we think the recent market turmoil has simply provided a catalyst for overdue corrections ,” he said, pointing to currencies in Latin America“Similarly, we expect some eurozone periphery spreads to rise again before long; the Japanese yen to strengthen further; and we think the 10-year Treasury yield will remain around its current level of about 4 per cent this year, given that investors’ expectations for the path of the fed funds rate now look fair to us.
In contrast, BCA Research’s chief global strategist Peter Berezin said he thinks investors should be wary. “The events of the past few weeks should give investors a taste of what is to come. We expect the S&P 500 to drop to 3750 in 2025 and the 10-year Treasury yield to fall to 3 per cent.” “PPI prices should remain comfortably in negative territory, further weighed by recent declining commodity prices.”
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