The ASX is expected to lift slightly today, bringing it to a nine-month high, on the back of strong tailwinds from Wall Street.
Overnight tech stocks rallied on the US markets, with closing figures indicating that the Nasdaq added 2% – up to 11,364 – at the close of play, while the Dow was up 0.8% to 33,630 and the S&P 500 lifted 1.2% to 4,020.
The positive investor sentiment was due to a general feeling that the next interest rate hike from the US Federal Reserve in its ongoing quest to tame inflation will be a small one.
Markets have priced in a near-100% chance that the central bank will only move by 25 basis points next Wednesday when it meets.
Australian investors are likely to catch this mood and run with it when local trading begins this morning.
Technology rebounds
Beleaguered chipmakers made gains for the first time since supply chain and inflation concerns stole their mojo, and this in turn buoyed the technology sector.
Shares in Qualcom rose 6.6% with American Micro Devices up 9.2% on a broker upgrade.
Added to that, Western Digital was up 7.1% following a report that the memory chipmaker could merge with Japan's Kioxia Holdings.
Streaming platform Spotify announced it would cut a staggering 6% of its global workforce and instantly saw its shares lift 2.1%. Shares in Tesla rose by 7.7% while Apple was up 2.4%.
Fourth-quarter reporting season is in full swing and pointing to some good results. Of the 57 companies in the S&P 500 to have so far released results, 63% have posted better-than-expected earnings, according to Refinitiv.
Heavy hitters like Tesla and Microsoft, along with Boeing Co (NYSE:BA), Dow Inc and 3M Co (NYSE:MMM), are expected to post results this week.
South American common currency
South America’s two biggest economies are toying with the idea of a common currency. Brazil’s new president Luiz Inacio ‘Lula’ da Silva and Argentina’s president Alberto Fernández wrote in a joint article published in an Argentinian paper that they wanted to generate closer economic ties.
The two leaders said they were keen to “move forward with discussions about a common South American currency” to reduce external vulnerability and cut operating costs.
Lula said that the common currency would also reduce reliance on the US dollar, which was on a rolling boil last year.
The countries belong to the Mercosur trade bloc, which also includes Uruguay and Paraguay. Talk of a common currency has been on the table from time to time since the bloc was formed in 1991.
“If it depended on me, we would have external commerce always in the same currency of the other countries so we wouldn’t have to depend on the dollar,” Lula said.
BHP on hunt for copper in Serbia
Big miners have turned their focus sharply to copper – vital in a range of ‘green economy’ outputs such as EVs, wind turbines and the grid itself – with BHP Group inking a deal to find new deposits for the base metal in Serbia, amid concerns over shortages.
The Australian giant has said building its copper and nickel business is a key priority as it looks to balance its portfolio away from fossil fuels and ultimately iron ore. The company has already built stakes in a copper explorer in Ecuador and a nickel company in Tanzania.
Just last month the big Australian agreed to acquire Australian copper producer OZ Minerals for roughly $US6.4 billion, while rival Rio Tinto swallowed up copper miner Turquoise Hill Resources in a $US3.1 billion deal.
BHP is now targeting three copper exploration targets in the Timok region of Serbia in a deal with Canada’s Mundoro Capital that will give it full control of any copper assets it finds.
In other news
Global oil prices were mixed overnight.
There was optimism about the re-opening of China, with data indicating that travel within and to the Asian giant was picking up. An apparently positive sign for the industry is increased road traffic congestion, which in the country's 15 key cities is up 22% thus far this month from a year ago.
Brent crude rose 56 US cents or 0.6% to US$88.19 a barrel, but US Nymex crude fell by 2 US cents to US$81.92 a barrel.
Base metal futures were up yesterday – the US aluminium futures price rose by 1.6%, while copper futures were up 0.1%.
Gold futures looked rosy, moving 40 US cents to US$1,928.60 an ounce, while spot gold was trading at around US$1,931 an ounce by day’s end yesterday.
Iron ore futures fell by 22 US cents a tonne or 0.2% to US$121.94 a tonne.