ASX poised to open higher ahead of US Federal Reserve meeting
Australian shares are poised to open higher today after US stocks rallied overnight on mounting speculation that the US Federal Reserve will sound dovish at its policy meeting this week. The Federal Reserve will hold a two-day meeting this week, with its latest interest rate decision, economic forecast, and statement scheduled to be released at 2pm EST on Wednesday.
Wall Street's major indexes edged higher on Monday ahead of this week's Federal Reserve meeting for affirmation of the central bank's commitment to a "patient" monetary policy. The Dow Jones climbed 65.23 (+0.25%) points, with gains hindered by a 2.0% fall in Boeing Co. The S&P 500 and NASDAQ 100 closed in positive territory, with the indexes gaining 10.46 (+0.37%) and 25.95 (+0.34%) points respectively.
The benchmark S&P/ASX200 index closed up 15.3 (+0.25%) points on Monday, bolstered by iron ore producers following a rally in iron ore futures. The mining sector was up 1.09% on Monday, with Fortescue Metals (+5.48%) posting the largest daily gains among the ASX200.
ASX 200 futures are currently up 20 points.
Commodities and Currencies
Oil prices further extended their rally overnight, with Brent and WTI crude currently sitting at US$67.54 (+0.57%) and US$58.99 (0.80%) respectively. On Monday, oil prices benefited from OPEC and other major oil producers cancelling a meeting planned for April which leaves the alliances price-boosting production cuts in place until at least June.
On Friday a Brazilian court ordered Vale to suspend operations at its Timbopeba mine, which produces 12.8 million tonnes of iron ore per year, thus driving the price of the commodity higher. Four per cent of the world's iron ore production has been taken offline since the deadly January 25 Brumadinho dam disaster. Iron ore prices are currently flat at US$88.00 per tonne.
The spot price of gold is currently up 0.10% at US$1303.72.
The AUD is currently down 0.06% at US71.00¢.
This article was written by Mithun Fernando – Investment Analyst, Rivkin Securities Pty Ltd. Enquiries can be made via [email protected] or by phoning +612 8302 3633.