Improved prospects for a peace agreement between the United States and Iran have set the scene for the Australian sharemarket to keep rising when trading resumes on Tuesday.
The ASX 200 is expected to open 0.27% higher at 10:00 am AEST (12:00 am GMT), based on Australian Securities Exchange (ASX) futures trading, which priced the benchmark’s June contract 24 points above the prior settlement at 8,735 points at the time of writing.
Investors were cheered by comments from United States President Donald Trump that a memorandum of understanding had been "largely negotiated", pushing offshore markets higher overnight.
Although the United States stock market was closed for the Memorial Day public holiday on Monday (Tuesday AEST), Nasdaq Composite and S&P futures and European equities markets closed higher.
This followed a stronger day on the Australian Securities Exchange (ASX) on Monday as positivity about a Middle East conflict breakthrough helped to lower crude oil prices.
The conflict, which has lasted nearly three months and blocked the crucial Strait of Hormuz oil-transport route, has lifted oil prices, stoking inflation fears and increasing the likelihood of higher interest rates to slow price growth.
"An Agreement has been largely negotiated, subject to finalisation between the United States of America, the Islamic Republic of Iran, and the various other Countries,” Trump wrote in a post on his Truth Social site.
"In addition to many other elements of the Agreement, the Strait of Hormuz will be opened."
The ASX 200 Index had finished up 0.4% at 8,692 points on Monday, with six of the 11 sectors ending in the green.
Among the stocks to watch on the ASX today are Goodman Group (ASX: GMG), which has released its third-quarter results.
On the bond markets, yields on Australian Government paper continued to fall with two-year rates down by 0.91% to 4.581% and 10-year rates 1.00% off at 4.784% at the time of writing.
