Continued expectations of lower official interest rates in the United States have set the Australian share market up to extend its gains on Tuesday.
An 0.4% increase in the S&P/ASX 200 is in prospect when the market opens at 10 am AEDT (11 pm GMT Monday), according to Australian Securities Exchange (ASX) futures trading.
At the time of writing, the December share price index contract was quoted 36 points over the previous settlement at 8,573 points.
U.S. stocks closed higher on Monday (Tuesday AEDT) as increasing confidence that the U.S. Federal Reserve would lower its Fed funds target rate in December overcame concerns about technology stock valuations.
This view was supported by dovish commentary from Fed Governor Christopher Waller, New York Fed President John Williams and San Francisco Fed President Mary Daly.
"The street is falling into the line of thinking that a rate cut is coming in December," Dakota Wealth Senior Portfolio Manager Robert Pavlik was quoted as saying in a Reuters article.
The Dow Jones Industrial Average added 0.4% at the start of a week shortened by the Thanksgiving holiday on Thursday and packed with economic data as the latest quarterly reporting season draws to a close.
But the biggest gains on Monday were by stocks in the S&P 500, which jumped 1.6%, and the Nasdaq Composite, which climbed 2.7%.
Google’s parent company Alphabet was among the tech stocks to surge, with its shares rising 6.3%.
This positions the ASX to add to the gains from Monday, when it bounced off six-month lows with the S&P/ASX 200 gaining 1.3%.
In corporate news today, Web Travel Group (ASX: WEB) releases earnings results while IPD Group (ASX: IPG) and Acrux (ASX: ACR) are among those holding annual general meetings.
In the bond markets, the Australian Government bond yield curve continued to flatten as two-year rates rose by 0.14% to 3.676% and 10-year rates fell by 0.78% to 4.428%.
