Australian shares are set to open sharply higher after a three-day break, supported by a powerful rally in precious metals.
ASX 200 futures were up 0.5% at 8,876 points, pointing to a strong start after gold briefly broke above US$5,100 an ounce for the first time and silver surged past US$114 an ounce.
Goldman Sachs said global risk appetite is “now very elevated”, with its risk appetite indicator sitting at its highest level since 2021.
US markets push towards record highs ahead of megacap earnings and Fed
US sharemarkets advanced for a fourth straight session on Monday as investors positioned for a heavy week of megacap earnings and a closely watched US Federal Reserve decision.
The S&P 500 was within 30 points of a fresh record high earlier this morning, with gains across nine of the 11 industry sectors led by communication services and information technology. Consumer discretionary was the main laggard.
At the close, the Dow Jones rose 314 points, or 0.6%, the S&P 500 gained 35 points, or 0.5%, and the Nasdaq added 100 points, or 0.4%.
Megacap stocks did most of the heavy lifting, with Apple and Meta Platforms jumping more than 2% ahead of earnings this week. Alphabet, Broadcom and Microsoft each rose more than 0.9%. Microsoft reports quarterly results on Thursday AEDT, with Apple due on Friday.
Wedbush Securities analyst Dan Ives said Wall Street continues “to way underestimate” Microsoft’s cloud computing platform, Azure.
US markets rose despite weekend comments from President Donald Trump threatening a 100% tariff on Canadian goods if Canada signs a trade deal with China.
In economic data, US durable goods orders jumped 5.3% in November, well above expectations. The Dallas Fed manufacturing index improved sharply to -1.2 in January from -11.3, while the Chicago Fed national activity index edged up to -0.04 in November.
US government bond yields drifted lower, with the 10-year Treasury yield down 2 basis points to 4.22% and the 2-year yield easing 1 basis point to 3.59%, despite strong demand for US$69 billion of 2-year notes.
European shares edge higher as banks lead, defence stocks weigh
European sharemarkets closed modestly higher on Monday as investors looked ahead to earnings from major banks including Deutsche Bank and Lloyds.
Banks led sector gains, rising 1%, while defence stocks fell 1.6%, limiting broader advances. The pan-European FTSEurofirst 300 index rose 0.2%, while the UK’s FTSE 100 edged up 0.1%.
According to LSEG data, earnings from the financial sector are expected to rise about 4% this reporting season.
Currencies firm against US dollar
Major currencies strengthened against the US dollar in European and US trade.
- The euro rose from US$1.1834 to US$1.1902 before settling near US$1.1880 at the US close.
- The Australian dollar climbed from US69.07 cents to US69.39 cents and was near US69.20 cents late in the session.
- The Japanese yen firmed from JPY154.42 to JPY153.33 per US dollar before easing back to around JPY154.10.
Commodities surge as precious metals steal the spotlight
Precious metals dominated commodity markets, with gold and silver extending historic rallies.
- Gold futures jumped US$102.80, or 2.1%, to US$5,082.50 an ounce, while spot gold traded near US$5,051 at the US close after hitting a record US$5,110.50.
- Silver briefly pushed above US$114 an ounce.
TD Securities said silver’s price action was “nothing less than historic”, driven by surging retail demand amplified by leveraged speculative positioning.
In updated forecasts, TD sees transitory highs of US$5,400 an ounce for gold and US$118 an ounce for silver in the first half of the year. The broker also forecasts US$3,000 platinum, US$2,250 palladium and nearly US$15,000 copper.
Base metals were broadly higher, with copper futures up 1.2% on demand expectations and supply concerns, while aluminium gained 1.3%.
Oil prices eased slightly after last week’s gains.
- Brent crude fell US29 cents to US$65.59 a barrel.
- US Nymex crude slipped US44 cents to US$60.63, as markets weighed winter storm impacts and geopolitical tensions involving Iran.
- Iron ore futures dipped US21 cents to US$106.15 a tonne amid ongoing geopolitical caution.
Looking ahead
In Australia, the NAB business survey is due, while Karoon Energy is scheduled to release a quarterly update. China reports industrial profits.
In the US, data on home prices, consumer confidence and manufacturing activity are released, while the Federal Reserve begins its two-day policy meeting.
Earnings are due from American Airlines, Boeing, General Motors, Kimberly-Clark, Texas Instruments, UnitedHealth and UPS.