Santa Claus is Coming to Town

The release of US Federal Reserve Open Market Committee meeting minutes overnight confirms what markets are pricing – a lift in US rates on December 16 is almost certain. However, in a sign that market sentiment is shifting, shares rallied as investors focussed on the stronger economy that is facilitating the Fed move.

The release of US Federal Reserve Open Market Committee meeting minutes overnight confirms what markets are pricing – a lift in US rates on December 16 is almost certain. However, in a sign that market sentiment is shifting, shares rallied as investors focussed on the stronger economy that is facilitating the Fed move.

Gains in US markets are creating a positive backdrop to today’s trading. However, commodity prices and a slew of AGMs could determine the outcome of the session. Copper continues to warn of weak industrial sentiment, despite a modest lift in oil prices. More positively, gold continues to sink, reflecting an overall increase in appetite for risk at the expense of safe haven investments.

BHP’s AGM in Perth may provide answers on the Samarco disaster, the company’s dividend policy and the outlook for commodities. Other AGMs with implications for the broader market and the economy include Sonic Healthcare, James Hardie and Australian Agriculture. Traders will watch bank stocks closer – the main driver of the local rally yesterday.

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