- S&P500 hit another all-time high. The US stock market is boosted by growth optimism and easy US monetary policy.
- ECB chief Mario Draghi said the ECB could ease monetary policy if incoming data showed a softening European economy.
- Increased tensions between Syria and Israel push up oil prices
The U.S. stock market hit yet another all-time high yesterday. Since its low five years ago S&P500 has risen nearly 140%. The market continues to be well supported by recovery hopes and the Federal Reserve’s accommodative monetary policy stance. Asian stock markets are fairly flat this morning, but the Japanese stock market is up more than 2% after reopening after a long weekend.
Yesterday, ECB chief Mario Draghi said that the bank could take further action to ease monetary conditions if incoming data warranted it. This gave some support to the European stocks markets that traded mostly sideways. Draghi’s comments weakened the euro slightly.
U.S. growth optimism has also pushed up bond yields; 10-year US Treasury bond yields are now near a three-week high.
Some geo-political risks are beginning to weigh on market sentiment. Oil prices have been volatile on concerns about increased tensions after Israel carried out an air attack on a military research centre on the outskirts of Damascus over the weekend.
This morning, the Reserve Bank of Australia cut its key policy rate by 25bp to 2.75% - in line with our expectations but contrary to the consensus expectation of unchanged rates.
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