The ASX Today

The ASX is expected to open higher this morning, following on from a global rally on markets on Friday.

ASX 200 SPI futures were up 30 points to 6015.

The Dow Jones Industrial Average added 224 points to be up 0.9 per cent to 26,616.71, while the broader S&P 500 index rose 33.6 points, or 1.2 per cent, to yet another record high of 2872.87.  

Key Points

• The ASX is expected to open higher this morning.
• The Australian dollar reached US81c on Friday, peaking at its highest level since May 2015.
• US stocks were boosted by solid earnings data and a weaker US dollar on Friday.
• No local data releases until Wednesday, but CommSec's quarterly State of the States report is out this morning.
• Global oil prices are at three-year highs, with Brent crude up 0.1 per cent to $US70.52 a barrel.

The Australian dollar continued to gain against a weaker US dollar last week and will enter today's trading at US81.04c. It's the highest the Australian dollar has been since May 2015 and is a gain of 8 per cent since December.

Some analysts see this appreciation as an effective monetary policy tightening, which could delay interest rate hikes by the RBA.

US stocks reacted positively to the softer US dollar during Friday trading, with technology and healthcare the best performing sectors. Stocks were also boosted by strong earnings growth, which Thomson Reuters estimated is at 13.2 per cent for fourth quarter earnings, up from an earlier estimate of 12 per cent.

IG Australia head of research Chris Weston said that with 36 per cent of the S&P 500 index set to report this week, the market will be watching the big-names.

“All eyes fall on names like Apple, VISA, Alphabet, Microsoft and Amazon to keep the momentum high in earnings beats, where nearly 80 per cent have beat on earnings expectations, with revenues up around 7 per cent,” he said.

Local investors may be keeping an eye on local tech stocks this week to see how results in the US carry over.  

In London trading on Friday, BHP and Rio Tinto were stronger, up 0.9 per cent and 0.1 per cent, respectively. This was despite a 0.6 per cent fall in the iron ore price to $US74.60.

Global oil prices rose to three-year highs on Friday, with Brent crude up 0.1 per cent to $US70.52 a barrel, and Nymex crude adding 1 per cent to reach $US66.14 a barrel.

The CommSec quarterly State of the States report has been released this morning. New South Wales again comes in first place, buoyed by construction and lower unemployment. Looking ahead, this Wednesday sees Australian CPI data for December released.  

For a closer look at the macreconomic landscape, check out Market Watch with Eureka Report market strategist Evan Lucas.