The increasing confidence of an interest rate cut in the United States next month that has buoyed Wall Street continues to spill over into sentiment in Australia with prices on the Australian Securities Exchange (ASX) set to rise further on Thursday.
A fourth consecutive rise on the ASX is in prospect despite higher-than-expected Australian inflation figures on Wednesday that boosted bond yields and kept a lid on the market the same day.
A 0.2% increase in the S&P/ASX 200 index is expected when the market opens at 10 am AEDT (11 pm GMT Wednesday), according to ASX futures trading, which quoted the December contract 20 points above the previous settlement at 8,646 points.
This comes after prices continued their ascent in New York for a fourth successive day on the back of renewed technology stock strength and the increasing probability of a December interest rate cut from the U.S. Federal Reserve.
The Dow Jones Industrial Average and S&P 500 each advanced 0.7% while the Nasdaq Composite added 0.8% on Wednesday (Thursday AEDT), the last trading day before the Thanksgiving Day public holiday on Thursday.
"Today and the half day on Friday are fairly light days from a trading standpoint and it's a pattern that you typically see I think around holidays like Thanksgiving where shortened volume and a little bit more optimism from retail investors," Horizon Investment Services Chief Executive Officer Chuck Carlson was quoted as saying in a Reuters story.
"The other factor is, in the last few days, Wall Street has pivoted backward rather strongly to the notion that the Fed's going to cut rates in December. And I think that's probably the biggest impetus for the market, not just for today, but for the recent days."
The S&P/ASX 200 closed 0.8% higher on Wednesday but was up by as much as 1.2% before October consumer price index figures showed inflation above market expectations.
In corporate action and news today, HUB24 (ASX: HUB) is holding an investor strategy day, and AGL Energy (ASX: AGL) is holding an investor site tour.
In fixed interest markets, Australian Government bond yields rose across the curve with two-year rates up by 2.58% to 3.779% and 10-year rates gaining by 1.26% to 4.489%.
