Australian stocks to rise after rally on Wall Street

The news: The Australian sharemarket is poised to open higher after sharp gains overnight for major US indices as strong economic data eased worries of a recession.

The numbers: The Dow Jones index jumped 0.96% — its biggest daily percentage gain in nearly six weeks. The broader S&P 500 climbed 0.84% higher while the tech-heavy Nasdaq gained 0.81%. US retail sales rose a better-than-expected 0.6% in August, while monthly producer prices rose 0.7%, also more than estimates. In the local market, ASX 200 futures were trading 88 points or 1.22% higher at 7283 points at 0700 AEST on Friday.

The context: The hotter-than-expected economic data eased worries about a US recession without raising fears of a Federal Reserve rate hike next week. Traders see near certainty of the Fed holding rates steady in its 20 September policy meeting and a near 67% likelihood of a further pause in November. Sentiment was also boosted by China’s central bank cutting reserve requirements to bolster its slowing economy.

What they said: "Today's economic data confirms the path toward a soft landing, but without being so hot that the Fed thinks they might need to do a couple more rate hikes," Ross Mayfield, Investment Strategy Analyst at Baird told Reuters.