The Australian equity market is set for a solid start to the trading session after US stocks surged after a confirmation from both France and Germany that they will do all they can to resolve the euro zone's banking and sovereign-debt troubles.
The Dow rose 330.06 points to close the session at 11433.18 with all 30 Dow components in the green with banking stocks leading the charge higher while the S&P500 index gained 39.43 points to finish at 1194.89.
The EURUSD (see above chart) rose the most in a year trading up from yesterday lows of 1.3380 to highs of 1.3701 on the back of French President Nicolas Sarkozy and German Chancellor Angela Merkel said they were determined to have a comprehensive package by the end of October. Europe should have its problems resolved before the summit of the Group of 20 leading economies in France, on Nov 4, Sarkozy said.
The AUDUSD traded above parity for the first time since Sept 22 as global stocks rallied spurred demand for the higher yielding asset.
Gold rises the most in a week as the decline in the US dollar spurs demand for the metal. Gold was strong throughout the night closing near its highs of 1675.65.
WTI oil climbed to a two week high overnight, trading up from lows 83.13 to as high as 86.05 as investors seem to be getting more optimistic about the outlook of the market.
The Volatility index traded down over 8.78 per cent to lows of 33.02. It has now dropped 29 per cent for the week.
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