Fed & BOJ: rates on hold – ASX to rally this morning

Australian shares are set to rally this morning, following the US stock market’s positive lead.

After weeks of anticipation, US investors (and indeed investors around the world) are now breathing a collective sigh of relief. This morning, the US Federal Reserve decided to maintain the federal funds rate at 0.25% to 0.5%. The market is now betting that the next rate rise will happen in December – after the world find outs whether Donald Trump or Hillary Clinton becomes the next US President.

Yesterday, the Bank of Japan also made a key monetary policy decision. The BOJ maintained it’s -0.1 per interest rate on bank deposits. It also decided to make yield-curve control the focus of its new policy.  The Japanese central bank will buy 10-year Japanese government bonds to maintain yields around the 0 percent mark.

Markets

Wall Street finished higher: The Dow Jones was up 0.9% to finish at 18,294, the S&P 500 gained 1.1% to close at 2,163 and the NASDAQ added 1 per cent to close at a new record high of 5,295.

European markets finished higher: London’s FTSE gained 0.1 per cent, Paris added 0.5 per cent and Frankfurt was up 0.4 per cent.

Asian markets finished higher: the Nikkei surged by 1.9%, the Hang Seng gained 0.6% and Shanghai Composite was up 0.1 per cent.

The Australian share market closed higher yesterday: The S&P/ASX 200 Index closed 36 points up to finish at 5,340. This morning, on the futures market, the SPI is up 32 points.

Currencies

The Australian Dollar at 7:20AM is buying $US76.33 cents, 58.57 Pence, 76.63 Yen and 68.22 Euro cents.

Company news

Vocus Communications’ (ASX:VOC) Chief Financial Officer, Rick Correll, has resigned from the company. Mr Correll will remain in his role in the next few months until Vocus can find a new CFO to replace him. After making that announcement, shares in Vocus Communications fell sharply by 9.91% to close at $6.09.

On the other hand, final services company, the Pepper Group (ASX:PEP), has appointed Mario Rehayem to a newly created position. Mr Rehayem will be the Managing Director of Australian Mortgages and Personal Loans from 1 October 2016. Shares in Pepper Group closed steady at $2.60.

Ex-dividends




Commodities

Gold has gained $20.80 to $US1,339 an ounce.
Silver has gained $0.64 to $19.91.
Copper is steady at $2.17 a pound.
Oil is up $1.57 cents to $US45.62 a barrel.