Great gains are projected for the ASX early after US investors turned positive when the Federal Reserve revealed it will buy individual corporate bonds to help prop up the economy.
The local SPI 200 futures contract was higher by 141 points, or 2.46 per cent, to 5,876.0 at 0700 AEST on Tuesday, indicating gains in share values early.
The Federal Reserve’s purchases will be part of its program to keep lending markets running smoothly, which allows big employers to get access to cash. They are also the latest reminder that the US central bank is doing everything it can to help support markets during the coronavirus pandemic, analysts said. The S&P 500 rose 25.28 points to finish at 3,066.59 – 9.4% below its record set in February. The Dow Jones Industrial Average gained 157.62 points, or 0.6%, to finish at 25,763.16. The Nasdaq composite added 137.21, or 1.4%, to 9,726.02. In Australia, New South Wales treasurer Dominic Perrottet is expected to tell Australia’s most populous state its economy will shrink by 10 per cent this financial year due to the virus crisis. Unemployment is tipped to reach 7.5 per cent.
The Australian dollar was buying 69.19 US cents at 0700 AEST, higher from 67.88 US cents at the close of trade on Monday.