The rising tide seems to have lifted all boats in the local market this morning with strong rises across almost all sectors.

The rally followed strong overnight performance in Wall Street, which was largely boosted by the continuous better than expected company earnings report in US. The second quarterly earnings for chip maker Intel also topped market estimates.

Australian consumer confidence level, released at 10:30 today, jumped 11.15% in July. This seems to indicate that investor confidence to take riskier assets seems to return to the market.

However, it is worth noting that trading volumes last night in the US remain low. The Dow Jones Industrial Average had trading volume of about 132 million compare with an average trading volume of more than 200 million in June. The strong rally of 146 points in Dow Jones Indus average with relatively thin trading volume might not be sustainable enough to support a bullish view. The market tends to remain volatile in the coming session as it will largely rely on upcoming events and announcements.

The local share market opened higher and kept close to its intraday high level close to noon, with technology sector taking the lead up nearly 2%, material sectors also erased its loss from yesterday up by about 1.6% around lunch time.

FX market

The Aussie dollar climbed higher on the back of strong rally in equity markets globally and the carry trade action (that is borrowing in low yield currency to invest in higher yield currency/assets). Both factors helped the Aussie dollar break its June high level. The AUD touched its intraday high of US$0.8850 on the back of better than expected local data on consumer confidence in July. The temporary resistant level is seen at around US$0.8883 level. The AUD needs a clear break (positive boosts from econ data or news) through that level to confirm it upward trend towards US$0.9070 mark.

Provided by www.Cityindex.com.au