Australia

Australian shares are set to rise at the open lower following a late-day rally on Wall Street. Investors cheered comments from Fed Chair Powell on slowing the pace of interest rate hikes.

ASX futures were up 53 points or 0.72% at 7362 as of 7:00am on Thursday, pointing to a gain at the open.

US stocks rallied after a speech from US Fed Chair Jerome Powell, where he said that the economy was approaching a “level of restraint that will be sufficient to bring inflation down,” and that the central bank moderating the pace of rate increases “makes sense.”

The S&P 500 gained 3.09%, while the Dow Jones Industrial Average rose 2.18%. The Nasdaq Composite leapt 4.41%, and the Russell 2000 gained around 2.72%.

Gains on Wall Street were restrained by a reminder from Powell about the ongoing challenges of restoring price stability. “Despite some promising developments, we have a long way to go,” he said.

In commodity markets, Brent crude oil gained 2.87% to US$85.41 a barrel, and gold gained 0.78% to US$1,763.50.

In local bond markets, the yield on Australian 2 Year government bonds dropped to 3.09% while the 10 Year dropped to 3.53%. Overseas, the yield on 2 Year US Treasury notes fell to 4.43% and the yield on the 10 Year US Treasury notes fell to 3.71%.

The Australian dollar hit 67.83 US cents up from the previous close of 66.76. The Wall Street Journal Dollar Index, which tracks the US dollar against 16 other currencies fell to 98.63

Asia

Chinese stocks were mostly higher on Wednesday, recovering from losses around Covid policy protests. The benchmark Shanghai Composite Index closed flat at 3,151.34,  The Shenzhen Composite gained 0.12% to 2018.69 and the ChiNext rose 0.24% to 2345.31. Chinese officials said they were “closely watching” the virus for developments when asked if the unrest would change the country’s zero-Covid policy. China’s November manufacturing activity came in below forecasts, dropping to levels last seen in April 2022.

Hong Kong shares had a late-day rally, with the Hang Seng index gaining 2.16% after Chinese officials announced a push to vaccinate individuals “over the age of 80” across the mainland. An official told reporters that as of Monday, 65.8% of the age group had received booster shots.

Japanese stocks ended lower, with the Nikkei 225 down on industrial production figures that showed a decline of 2.6% compared to a month ago. This was more than the expected decline of 1.5%, according to a Reuters poll.

Europe

European markets closed higher as investors cautiously awaited euro zone inflation data for the month of November. The pan-European Stoxx Europe 600 gained 0.78%, with automotive stocks outperforming before all sectors entered positive territory. The German DAX gained 0.29% and the French CAC 40 gained 1.04%.

London's FTSE 100 closed up 0.81% to 7573 points, marking its best monthly performance in two years. Commodity and consumer stocks led the way in hopes of inflation slowing and a Chinese recovery and quelling of Covid-policy unrest. Hani Redha, portfolio manager at PineBridge Investments told Reuters a decreasing risk of energy rationing was aiding views for cooling inflation. "There is a lot of room for inflation to come down, and that's what the market is picking up on and that has positive implications for consumer discretionary."

North America

US stocks rallied in response to an announcement from US Fed Chair Jerome Powell that the central bank moderating the pace of rate increases “makes sense,” and that the economy was approaching a “level of restraint that will be sufficient to bring inflation down.”

The S&P 500 gained 2.65%, while the Dow Jones Industrial Average rose 1.70%. The Nasdaq Composite leapt 3.81%, and the Russell 2000 gained around 2.02%.

Gains on Wall Street were restrained by a reminder from Powell about the ongoing challenges of restoring price stability. “Despite some promising developments, we have a long way to go,” he said.

"Investors are looking for that rock of certainty – something to hang your hat on for greater predictability of where the Fed's going with interest rates," said Greg Bassuk, CEO of AXS Investments to CNBC. "The messaging that the pace of rate increases can begin slowing as early as December was that rock."