The Bernanke factor finally appears to be waning on global markets.
Wall Street advanced modestly to new records overnight, up around 0.12%, after the Federal Reserve chairman reiterated his point that monetary policy would only tighten when the economy strengthened – and that was still some way off.
That should give Australian investors confidence this morning, with most awaiting production figures from Woodside Petroleum.
Oil and gas stocks have outperformed the miners by a country mile in the past two years as the oil and gas sector has risen 27% while materials have barely moved.
The Fed chairman repeated his comments from last week that monetary policy would remain “highly accommodative for the foreseeable future” because “the economy is weak and inflation low”.
The US central bank, he said, would respond to the data, that there was no set timetable to taper off the massive bond purchasing program that has pumped $US85 billion a month into the American economy and forced interest rates and the greenback lower.
In fact, he added the US Fed may “potentially increase purchases if the economy weakens”.
The comments are likely to provide support for the Australian dollar, which was hovering around US92.34c in early trade this morning (see Sam Fimis's A minute rise for the dollar).
Copper, lead and zinc prices eased overnight, while nickel rose. Spot iron ore prices have been surprisingly strong this week, inching towards $US130 a tonne.