The ASX is set for big early gains following Wall Street’s enthusiasm over the Federal Reserve’s plan to 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 0800 AEST on Tuesday.
The Federal Reserve’s purchases will be part of its $US1 trillion ($A1.5 trillion) bond-buying program to keep lending markets running smoothly, which allows big employers to easily access cash.
They are also the latest reminder the US central bank is doing everything it can to support markets during the coronavirus pandemic, analysts say.
The S&P 500 rose 25.28 points to finish at 3,066.59 – 9.4 per cent below its record set in February.
The Dow Jones Industrial Average gained 157.62 points, or 0.6 per cent, to finish at 25,763.16. The Nasdaq composite added 137.21, or 1.4 per cent, to 9,726.02.
In Australia on Tuesday, the Reserve Bank’s June board meeting minutes will be published.
Economists will be looking for any comments about the Aussie dollar’s recent surge and the expected timing of economic recovery.
NSW 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 coronavirus crisis.
Unemployment in the state is tipped to reach 7.5 per cent.
The Australian dollar was buying 69.19 US cents at 0800 AEST, higher from 67.88 US cents at the close of trade on Monday.