Markets Live: ASX set to climb

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Here's IG's Ilya Spivak on the markets;

Australian shares are set to rise by 17 points at the open. Yesterday the ASX rose by 67 points. The only laggard of the 12 sectors that comprise the index was real estate.

Property is famously interest rate-sensitive, and local 10-year Treasury yields are edging closer to 3%. This is a level not touched since 2015, and only then briefly before moving lower to the nadir of 1.81% in August of 2016.

The mood across financial markets continued to brighten Thursday. Global shares advanced, epitomising a broad-based recovery in sentiment-geared assets, while top anti-risk alternatives like US Treasury bonds declined.

Tellingly, the US Dollar also faced renewed selling pressure, hinting that ebbing worries about an aggressive Fed rate hike cycle are giving way. The narrative prevailing before a surge in US wage growth spooked the markets is seemingly back at the forefront.

That envisions a broadening global recovery that will push central banks to follow the hawkish lead of their US counterpart, pushing capital flows toward riskier assets and would-be rising yields outside of the world's largest economy.

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Australian shares are poised to rise after Wall Street rallied more than 300 points, lifted by Cisco and Apple.

On Wall Street, all three major benchmarks were higher in the first hour of trading with each extending their gains into the final hour of the session.

The Dow retook the 25,000 level as the S&P 500 retopped 2700. The VIX closed little changed at 19.26. US producer prices rose in January.

Apple surged more than 3 per cent on news that Warren Buffett's Berkshire Hathaway lifted its stake in the iPhone maker by 23 per cent to about 165 million shares. Apple has rebounded more than 11 per cent from its February 8 low during the global market sell-off.

Berkshire also noted in a securities filing that it bought more shares in Israel's Teva Pharmaceuticals - its US listed shares surged more than 7 per cent.

The yield on the US 10-year note was flat at 2.90 per cent at 4.03pm New York time, according to Bloomberg pricing. Australia's 10-year last yielded 2.92 per cent.

All the overnight market action in numbers:

SPI futures up 21 points or 0.4% at 5883 near 8.05am AEDT
AUD +0.2% to 79.39 US cents
On Wall St, about 4pm: Dow +1.2%, S&P 500 +1%, Nasdaq +1.6%
In New York, BHP +1.4% Rio +1.6%
In Europe: Stoxx 50 +0.6%, FTSE +0.3%, CAC +1.1%, DAX +0.1%
Spot gold +0.3% to $US1354.39 an ounce
Brent crude +0.1% to $US64.45 a barrel
US oil +1.6% to $US61.55 a barrel
Iron ore flat at $US78.43 a tonne
10-year bond yield: US 2.90%, Germany 0.76%, Australia 2.92%

On the economic agenda today:

BusinessNZ manufacturing PMI January.
UK retail sales January
US housing starts January, Building permits January, University of Michigan consumer sentiment February

Stocks to watch

Breville Upgraded to Overweight at JPMorgan, Upgraded to Outperform at Credit Suisse
CBA Upgraded to Buy at Morningstar
Evolution Mining Downgraded to Neutral at JPMorgan
Fletcher Building Cut to Hold at Deutsche Bank
GrainCorp Downgraded to Neutral at Goldman
Skellerup Upgraded to Neutral at First NZ Capital
South32 Downgraded to Reduce at Morgans Financial, Downgraded to Underperform at Macquarie
Suncorp Upgraded to Outperform at Credit Suisse, Upgraded to Add at Morgans Financial
Telstra Downgraded to Hold at HSBC

Good morning and welcome to the Markets Live blog for Friday.

Your editor today is Sarah Turner.

This blog is not intended as investment advice.

Fairfax Media with wires.

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