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Morning Market Update: Raising The SPI Ceiling

Global markets rebounded in style overnight, with the benchmark US indices surging at least two percent each as politicians inched closer to a budget agreement.

As talks between President Obama and his chief political opponent, John Boehner, continued, reports emerged of a Republican proposal to extend the debt ceiling for six weeks.

Although this encouraging development reinforces the idea that politicians are not willing to risk a US default, the two major parties still remained divided on reopening the US government.

Wall Street remained in a buoyant mood even though data showed a surprise jump in weekly jobless claims, adding to signs the economy is being squeezed by Washington’s budget fight.

The Dow soared 323 points (+2.18%) to 15126, the S&P500 rallied 37 points (+2.2%) to 1693 and the Nasdaq flew 83 points (+2.3%) to 3761.

Oil was a significant mover in commodity markets, rallying 1.4% to US$103.01 a barrel on the US budget progress and after an OPEC report revealed a drop in production last month.

There was little love for gold, which slipped 0.8% to US$1297 an ounce as the rally in equities dulled demand for the yellow metal’s perceived safety.

Among the currencies, the yen was sold off as money flowed out of safe havens. Elsewhere, the pound inched higher against the greenback as the Bank of England opted to leave its stimulus program unchanged.

There is no major economic data due for release today.

Morning Market Update: Raising The SPI Ceiling is a post from: Australian Stock Report Market Pulse Blog

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