Global indices were a sea of green at last close. While US markets were closed on Monday for Memorial Day, there were gains across the board. On Friday the Dow was up 576 points or 1.8%, while the S&P 500 rose by 2.5% and the Nasdaq index gained 390 points or 3.3%.
Over the week the Dow rose 6.2% and the S&P 500 rose 6.6% – the biggest jump for either since November 2020, while the Nasdaq gained 6.8%.
The Australian dollar edged closer to 72 US cents, but more about that later.
Only ASX futures were pointing in the wrong direction early this morning, down 12 points or 0.16% to 7,283, predicting a dip when trading begins.
“Maximum pressure on Russia to end war”
Global oil prices moved up by just shy of 2%, with Shanghai residents once again allowed to drive their cars and an expectation among investors that the EU was edging closer to an agreement to ban Russian imports.
News just in from these EU talks is that the European leaders have settled on a partial ban on Russian oil imports as part of a sixth package of sanctions against Russia.
The bloc of 27 nations has been flagging a total embargo on Russian oil for weeks but has faced resistance from Hungarian incumbent Viktor Orban, who protested that bans on pipeline-delivered oil would wreck his country’s economy.
During the summit, the head of the European Council Charles Michel tweeted: “Agreement to ban export of Russian oil to the EU. This immediately covers more than two-thirds of oil imports from Russia, cutting a huge source of financing for its war machine. Maximum pressure on Russia to end the war.”
Brent crude rose by US$2.24 or 1.9% to US$121.67 a barrel, while US Nymex crude rose by US$2.10 or 1.8% to US$117.17 a barrel.
Energy pain points
The rising prices will no doubt put further pressure on the Australian Government to extend temporary easing of the fuel tax.
Fuel pressures will join a spike in wholesale gas prices in Victoria of up to 50 times normal levels to turn the screws on the current costs of living and doing business.
The sudden rise – to $382 a gigajoule – prompted the Australian Energy Market Operator (AEMO) to cap prices in the southern state, following recent caps in the Sydney and Brisbane markets in the last few days.
The move follows the collapse of NSW gas retailer Weston Energy and comes amid concerns that soaring energy prices will be the enduring pain point of 2022, pushing everything else up in their wake.
Is crypto a good choice?
On bitstamp.net, bitcoin was 7.5% higher to $US31,257 this morning.
Since record highs of US$69,000 in November, an estimated $US1.5 trillion has been wiped off the value of the entire cryptocurrency market – more than half its value gone in six months.
Consumer advocacy group Choice called for stronger consumer protections on the high-risk investment, saying there was widespread market manipulation and that the system was rigged against consumers.
The organisation says one in nine Australians have bought cryptocurrencies in the past year and that number is expected to increase in coming years. Half see it as a long-term investment, while two in five see it as a diversification of their portfolio.
Good news for the dollar
Commodities are looking strong today, with all base metals up and nickel leading the charge, up 3.5%.
The Commonwealth Bank’s currency analysts predict that the Aussie dollar is on the rise and expect it to be trading at 76 US cents by the end of the June quarter. It was hovering around 72 US cents overnight, which is 4 cents above the May low.
The emergence of China from its COVID-zero lockdown and positive commodity forecasts, along with the 'interest rate differential' between the US and Australia all fed into the bank’s analysis.