Australian shares are trading higher on Friday, after European stocks rose on hopes of smaller interest rate rises from the US.
Meanwhile, Binance announced $US1 billion ($1.47 billion) crypto bailout.
The benchmark ASX 200 closed up 0.2 per cent, to 7,259, while the broader All Ordinaries was up 0.2 per cent, to 7,447.
Nine of 11 sectors ended higher on the top 200 companies index. Telecommunications services was the best performing sector, gaining 1.2 per cent and 1.5 per cent for the past five days.
Top-performing stocks were Nanosonics, Ramelius Resources, Virgin Money, Megaport and Smartgroup.
The biggest drags on the ASX 200 were Allkem Limited, Pilbara Minerals, Lake Resources, Core Lithium and Sayona Mining.
The Australian dollar was up 0.1 per cent, sitting on 67.70 US cents.
AMP Chief Economist Shane Oliver said share markets resumed their rally over the last week helped by further signs of a slowing in rate hikes from the Fed and a decline in bond yields.
"The positive global lead saw Australian shares rise around 1.6 per cent to their highest since May and they are now down by only around 2.4 per cent for the year to date," Mr Oliver said.
He said the main concern is the rising risk of recession in the US as this would drag down global and Australian growth and profits.
"The US yield curve has continued to invert and its business conditions PMIs are weaker than in other major countries and pushing near recessionary levels, as is its leading indicator."
In company news, EML Payments shareholders removed chairman Peter Martin at the company's annual general meeting.
Investors also delivered a first strike on executive pay. EML shares closed a huge 22.6 per cent higher.
It's been a bad year for EML,which has faced regulatory problems in the UK, a fall in forecast profit and CEO Tom Cregan leaving.
Commodities
Spot gold was was up 0.7 per cent, selling for $US1,758.40, by 4.40pm AEDT.
On oil markets, Brent crude was up half a per cent, at $US85.76 per barrel, while West Texas crude rose 0.8 per cent, at $US78.53 per barrel.
Euro markets rise on hopes US rate hike cycle nearing end
Shares hit a two-month high on Thursday and the US dollar swooped towards a three-month low, after the Federal Reserve signals smaller interest rate rises from next month, followed by the message from Frankfurt that the European Central Bank (ECB) will plough on.
Wall Street was shut for the Thanksgiving public holiday, so it was up to Europe to continue the rebound in market confidence.
"The Federal Reserve minutes signalled that some sensible voices are trying to drown out Fed Chair Powell’s relentless 'hike, hike, hike' chant," UBS Chief Economist Paul Donovan said.
A "substantial majority" of Fed policymakers had agreed it would "likely soon be appropriate" to slow the pace of interest rate rises, the minutes released on Wednesday showed.
However, Mr Donovan pointed out that there was no signal of an actual halt yet and various Fed members thought rates might need to go "somewhat higher" than expected.
Futures markets show investors now see US rates peaking just above 5 per cent by May and are pricing in a roughly 75 per cent chance that the Fed now switches to 50-basis-point rises rather than the 75 bps it has been applying recently.
Mr Oliver said with a recession risk in the US now up around 55 per cent and forward-looking price indicators easing, there is now a strong argument for the Fed to pause on the grounds that a recession or significant slowdown will lead to much lower inflation ahead.
"On previous occasions when the Fed Funds rate rose above the 10-year bond yield in 1989, 2000, 2006 and 2019 the Fed paused rate hikes knowing that yield curve inversions often precede recessions," Mr Oliver said.
"To continue hiking too far from here could risk a deep recession which invariably suppress inflation."
On previous occasions when the Fed Funds rate rose above the 10-year bond yield in 1989, 2000, 2006 and 2019 the Fed paused rate hikes knowing that yield curve inversions often precede recessions. To continue hiking too far from here could risk a deep recession which invariably suppress inflation.
The ECB's equivalent minutes out on Thursday showed its rate-setters fear that inflation may now be getting entrenched in the euro zone.
"Incoming data so far suggest that the room for slowing down the pace of interest rate adjustments remains limited, even as we are approaching estimates of the 'neutral' rate," one of its most influential Executive Board members Isabel Schnabel said separately.
For the currency markets, it meant the seven-week sell-off in the dollar continued.
The euro rose as high as $US1.0447, edging it closer to its recent four-month top of $US1.0481, while the US dollar weakened 0.6 per cent against the Japanese yen to 138.70 yen and past $US1.20 against sterling.
"The dollar could stay pressured for a bit longer, but it's probably embedding a good deal of Fed-related negatives now," analysts at ING wrote.
Meanwhile, the pan-European STOXX 600 index gained 0.5 per cent, Germany’s DAX was up 0.8 per cent and Britain's FTSE was a percentage point higher.
Binance billion dollar crypto bailout
Meanwhile, cryptocurrency exchange Binance said on Thursday that it was committing $US1 billion to establishing an industry recovery initiative (IRI) to invest in companies from the digital assets sector.
That move comes at a time when the crypto market is teetering from the collapse of FTX, which is seeking Chapter 11 bankruptcy protection in the United States.
The collapse of one of the biggest crypto exchanges in the world has also fuelled worries around the industry's continued ability to draw investments from venture capital and private equity giants.
Binance said it intended to increase its commitment amount to $2 billion in the near future, depending on need.
"We anticipate this initiative will last about six months and will be flexible on the investment structure — token, fiat, equity, convertible instruments, debt, credit lines, etc.," the crypto exchange added in a statement.
It said such a fund would help "reduce further cascading negative effects of FTX" without giving an exact figure for the bailout.
Several crypto firms have been bracing from the FTX collapse, with many counting their exposure in millions to the beleaguered exchange.
ABC News/Reuters
