Across Asia, regional markets are all firmer this afternoon as global confidence continues to improve on expectations the Federal Reserve will pump more money into the ailing US economy. The US dollar has weakened further during Asian trade, boosting US dollar denominated commodities. The Nikkei 225 is the best performer, up 1.8% while the Hang Seng, Kospi and Shanghai Composite are all firmer between 0.4% and 1.6%.

In Australia, the ASX 200 is currently 1.5% firmer at 4689, just off its earlier highs of 4700. Gains for the day are broad based with the materials sector once again the standout performer with a gain of more than 2.5%. Elsewhere, the energy, financials and industrial sectors are all seeing advances of more than 1%. The heathcare sector is the only laggard on the day thanks to several companies with USD denominated earnings being impacted by the record high AUD.

The market seems to have been hit by another wave of bullishness during Asian trade today. Earlier in the week, there were signs that participants were starting to take profits and position themselves for a pullback. However, it looks like we're seeing a scramble to get long again.

We've potentially got dual forces at work - the economic backdrop is being supported by the expectations of further quantitative easing whilst a stronger-than-expected start to US Q3 earnings is boosting confidence further.

The ASX 200 also looks to be re-establishing its strong correlation with the AUDUSD, which set a fresh post-float high of 0.9982 earlier. Everything at the moment is favouring risk currencies; the weaker USD, higher commodity prices, diminishing concerns over the prospects of a double-dip recession and plenty of cash on the sidelines.

Ben Potter, Market Strategist with IG Markets