Market closes firmly higher
The Australian sharemarket reversed yesterday's drop after an uptick in domestic jobs data, US Federal Reserve Chairman Janet Yellen promised to keep interest rates low and Chinese trade data soothed growth pessimism.
The S&P/ASX 200 index followed the global rally, climbing 41 points, or 0.75 per cent, to 5476.8 after Ms Yellen said global benchmark US rates would be maintained "for a considerable time after the asset purchase program ends".
The Australian dollar rose US0.3� to US93.70� after the economy created 14,200 new jobs in April, slightly better than the 8800 consensus forecast, with no change in part-time jobs. Government 10-year yields were marginally softer at 3.824 per cent
Discussing dollar resilience, National Australia Bank global head of currency strategy Ray Attrill said the switch from construction phase to the production phase of the "resources boom" would support the dollar.
"But the combination of the high degree of foreign ownership of the mining sector, the US dollar-functional currency status of the big miners and low marginal production costs in the iron ore and LNG sectors, means that a large proportion of the revenues generated from the ramp-up in resources exports will not flow back into Australia or its currency," he said.
The Shanghai composite index was up 0.7 per cent at the close of the ASX after the Chinese imports and exports both beat forecast with increases of 0.9 per cent and 0.8 per cent respectively, leading to a trade surplus $US18 billion.
Export growth was better than the headline suggested as the "over-invoicing" of Hong Kong and Taiwanese trade faded and exports to the rest of the world rose 10.2 per cent.
In Tokyo the Nikkei index rose 0.7 per cent.
Gold fell $US20 to $US1290 an ounce and copper fell 0.7 per cent to $US6670 a tonne. Spot iron ore lost 0.8 per cent to $US105.20 a tonne, and Dalian iron ore futures were off per cent.
More to come…
