Australian shares are set to rally on positive sentiment from Wall Street as the sell-off in global bonds at least temporarily reversed, and bets on US interest rate rises plunged. Oil surged back above $US102 a barrel.
ASX 200 futures were up 45 points or 0.5 per cent to 8678. In New York, the S&P 500 was 0.2 per cent higher, with energy and industrials pacing the advance of five of the 11 sectors.
After having surged to a 24-year high the previous session, the yield on the US 10-year bond reversed. At 4.59pm in New York (6.59am AEST), it was 4 basis points lower to 5.24 per cent. The 30-year yield was trading at 5.61 per cent.
The reversal reflected, in part, somewhat weaker US manufacturing data, tempering some bets that the Federal Reserve would need to lift rates over the next few months. It also reflected, Bloomberg reported, a rush for haven assets amid rising concerns about France’s fiscal and political outlook.
In addition, Fed vice chairman Philip Jefferson said policymakers may need “more time” to assess risks. “We think Jefferson’s comments are consistent with our view that an October hike is now unlikely,” Goldman Sachs chief US economist Jan Hatzius said in a note.